You will apply economic principles presented in Weeks One through Three in this week’s assignment. Your assignment will be reviewed by your peers and by your facilitator in week five and should be revised as necessary based on feedback as the first part of the final assignment in week six.
Select a new, realistic good or service for an existing industry.
Select a new, realistic good or service for an existing industry.
Write the economic analysis section of a business proposal. This will include statements about the market structure and the elasticity of demand for the good or service, based on text book principles. You need to create hypothetical data, based on similar real world products to estimate fixed and variable costs.
Write the economic analysis section of a business proposal. This will include statements about the market structure and the elasticity of demand for the good or service, based on text book principles. You need to create hypothetical data, based on similar real world products to estimate fixed and variable costs.
Required Elements:
- Identify market structure
- Identify elasticity of the product
- Include rationale for the following questions:
- How will pricing relate to elasticity of your product?
- How will changes in the quantity supplied as a result of your pricing decisions affect marginal cost and marginal revenue?
- Besides your pricing decisions, what are your suggested nonpricing strategies? What nonpricing strategies will you use to increase barriers to entry?
- How could changes in your business operations alter the mix of fixed and variable costs in line with your strategy?
- No more than 1400 words
- Your proposal is consistent with APA guidelines
NOTE: THE ATTACHMENTS PROVIDED ARE EXAMPLES/GUIDELINES TO GIVE AN IDEA OF THE DIRECTION OF THIS ASSIGNMENTAttachments:
University of Phoenix Material
Will Bury’s Price Elasticity Scenario
Will Bury, an enterprising inventor, is convinced that soon everyone will be reading or listening to everything digitally, including books that have been mostly available in hard copy. He knows that there are books on CD, but these are relatively expensive and have been recorded using human readers. He also knows that there is technology that can transform the printed word into audio, but the sound is somewhat inhuman. Will plans on speeding up the transformation with a proprietary technology he has developed and patented. This technology takes the printed word for text materials and creates a file with the option of reading it digitally or listening to it with a realistic synthetic voice. Will knows that he has free access to books no longer under copyright protection, and he figures he can pay a royalty fee of $5 per title for copyrighted books that will greatly expand his catalog. So far, he has limited himself to English-language books but is working on a language translation option as well.
To date, Will’s technical skills outpace his business acumen. He is struggling with some basic decisions. He has been working on his invention as a garage operation for the last few years and has missed many of his daughter’s soccer games while working at High Tech Digital Industries to keep his family comfortable on his $200,000 annual salary and benefits package. Will may eventually have to decide whether to devote most of his time to his invention. Moreover, he is not sure how to determine all the applications for his technology, who would want it, how it would be delivered to customers, how many books would be bought at what price, and so forth. Even after he has secured the rights to copyrighted material, he needs some help acquiring the books he wants to digitally transform and scanning them into his digitizer. It is not difficult to train others to do this, but the process takes about an hour per 500 pages to complete. To make sure the process works well, Will has been doing this himself, but he realizes this is neither a good use of his time nor will it get many books digitized. Fortunately, the digitizer Will uses is inexpensive to reproduce for others to use, and Will is certain that the security he has encoded into it will prevent others from unauthorized replication of the device. Where are the people Will can hire to do the work, and how much should he pay them? If it is easy to train workers in the United States to do this, could Will pay $10 an hour for someone with the skills of a high school graduate? If this is the skill level, could he pay a worker overseas $2 an hour for the same service?
