Select an existing good or service from the Will Bury’s Price Elasticity, Incremental Costs, or Thomas Money Service Inc. scenarios, or select an existing business with which you are familiar.
Write a business proposal to improve an existing good or service for your chosen company. Include assumptions about the elasticity of demand and the market structure for the company’s good or service. Analyze data to determine fixed and variable costs.
Include rationale for the following questions:
• How will you increase revenue?
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.