Eco 561 Business Proposal V2

1575 Words Mar 7th, 2013 7 Pages
Business Proposal Paper
Ronald S. Albergo
ECO 561
3/11/2013
Kevin McKinley

Introduction
Within any industry the fiscal or economic goals are to increase revenue; determine the fixed and variable costs for the business; and determine how to maximize profit. In order to reach those goals an organization needs to establish the pricing structure, product differentiation, and how to minimize the costs for the product. In this proposal will layout the strategies to reach those goals in order to make a more economic successful organization.
Company Background
A sound prediction made by the organization is, in the very near future, society will be moving exclusively to digital. Books, news, magazines, TV shows, and movies the boom in
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He will also need to consider the variable costs such as licensing fees, the cost of employees, and any outsourcing fees if elected to go that route.

Profit Maximization
In order to determine how many titles the organization should transform (products to offer), it could compare total revenue and total cost; or, compare the marginal revenue and marginal cost. (McConnell, Brue, & & Flynn, 2009, p. 180) Focusing on the first method of total revenue and total cost. Using the numbers mentioned above, the organization’s total revenue for the older titles if they were to lower the prices to $8, TR= $8,000. Couple this with the idea that the transformation of the older titles should be minimal to nothing because of the fact that it will be done internally. It would be important to estimate the cost of creating the files at $3 a book since the organization is currently using very low cost venue and the organization is consuming the utilities that match that. For the same 1,000 books we used to figure total revenue, TC=$3,000. The organization will be establishing a total profit of $5,000.
The second and final option is to analyze marginal revenue and marginal cost. This process is done by comparing the amount each additional unit of output is costing and adding it to the total revenue and total cost. Unfortunately, this information was not made available for this
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