Will Bury's Price Elasticity

612 Words3 Pages
Outline I. Introduction a. Overview of the case b. The purpose of the paper II. Analysis a. Marginal analysis b. Law of demand c. Law of Supply d. Market Equilibrium e. Price Elasticity III. Conclusion In Will Bury’s case scenario, Will is an enterprising inventor, who made a decision to make a business of selling audio digitized copies of books using his patented technology. Being an engineer in mind, Will has little knowledge of business concepts, and in that regard, the first attempt of providing older books with lapsed copyright and newer books at higher prices, resulted in low sales with proportions contradicting his expectations. In order to outline the main areas of weaknesses in Will’s decision, this paper provides a brief overview of the basic concept of economics, which Will might have missed due to his lack of knowledge. The first principle that should be mentioned is the marginal analysis. This concept is related to weighing the costs and the benefits of a particular decision (McConnell, 2009, p. 5). In that regard, prior to taking vital decisions, such as raising the price of the book, Will should establish the marginal costs and the marginal benefit of such decision, and compare them in order to establish the reasonability of taking such move. Such basic concept can be applied to all the decisions presented in the scenario, such as digitizing older books, using CD copies of the books, or hiring employees to do the job. Another important concept is related to demand and supply, where for the first part, the law of demand states that with other things equal, there is an inverse relationship between price and quantity demanded (47). Applying this concept to Will pricing decisions, the demand can be increased by lowering the price of the product, and vice versa.
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