revenue cost paper

revenue cost paper - BURYS PREDICAMENT 1 Burys Predicament...

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BURY’S PREDICAMENT 1 Bury’s Predicament Fred Johnson Eco 561 April 21, 2010 Dr. Augustine Hammond
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BURY’S PREDICAMENT 2 BURY’S PREDICAMENT Will Bury is an entrepreneur who patented a process of converting books into digital files for customer to listen to or download for personal use. He has used his personal monies and time to research and develop this technology (Apollo Group, 2007). Currently, he is unsure about the basic economic principles in developing a successful business. This business proposal will give Bury recommendations on how to increase revenue for his company, improve production cost, determine how to adjust variable and fixed costs to maximize profit, and identify methods to reduce production costs. INCREASING REVENUE Before Bury can consider methods of increasing revenue, he must first determine and understand the demand for his product. “Demand is a schedule or a curve that shows the various amounts of a product that consumers are willing and able to purchase at each of a series of possible prices during a specified period of time” (McConnell, Brue, & Flynn, 2009, p. 55). A recommendation is for Bury to do additional research to identify specific demands of his target consumers. He should be familiar with his potential buyers’ profiles, income, preferences, and also his competitors’ goods in order to set an initial price for his digital books. McConnell, Brue, and Flynn states “the basic determinants of demand are consumers’ tastes (preferences), the number of consumers in the market, consumers’ incomes, the prices of related goods, and consumer expectations about future prices and incomes” (2009, p. 48). This information will allow Bury to effective plan and set strategic goals in increasing revenue in the market. Bury is operating his organization in a differentiated oligopoly market because
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revenue cost paper - BURYS PREDICAMENT 1 Burys Predicament...

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