1)What factors effect the demand for a smart phone? What are the substitutes for the iPhone; What do they cost? How does this impact demand for the iPhone?

2)With the minimum wage increasing dramatically over the next several years (from $7.25 to $15), McDonalds is testing new order kiosk technology. These may have been prohibitively expensive when labor costs were at $7.25, but at $15, the machine is an attractive alternative for the supplier. Regarding elasticity, remember that a product without a substitute will likely have inelastic demand (people will pay anything, almost, for the product...think insulin for diabetics). If there is a substitute available, the demand will likely be elastic. Thoughts?

1. The demand for a smart phone is affected by several factors. Firstly, the brand of the smart phone matters. Since the brand name creates an impression about the quality of the phone, brand loyal people tend to convince other people to purchase the brands. The convenience of the smart phone also increases the demand of the smartphone since they are easier to carry than laptops and tablets. Thirdly, the price of the smart phone also affects its demand. For instance, the cheaper the smart phone the more would be its demand. The demand of the smart phone is also affected by its features like the type of hardware and software has been used in its production. Lastly, the needs of the individuals and social influence also affects the demand for smartphones.

2. It's true that availability of a substitute increases the elasticity of a product. Same is the case with labor. New order kiosk technology will act as a substitute of labor for taking orders at Mc Donald's. This will increase the price elasticity of demand for labor which means that a slight increase in wage will lower down the demand for labor by a large amount.