You are starting your own Internet business. You decide to form a company that will sell cookbooks online. Justcookbooks.com is scheduled to launch 6 months from today. You estimate that the annual cost of this business will be as follows:<\/p>\n
Technology (Web design and maintenance)<\/p>\n
$5,000<\/p>\n
Postage and handling<\/p>\n
$1,000<\/p>\n
Miscellaneous<\/p>\n
$3,000<\/p>\n
Inventory of cookbooks<\/p>\n
$2,000<\/p>\n
Equipment<\/p>\n
$4,000<\/p>\n
Overhead<\/p>\n
$1,000<\/p>\n
Part I<\/p>\n
Deliverable Length: 1 graph plus calculations<\/p>\n
You must give up your full-time job, which paid $50,000 per year, and you worked part-time for half of the year.<\/p>\n
The average retail price of the cookbooks will be $30, and their average cost will be $20.<\/p>\n
Assume that the equation for demand is Q = 40,000 \u2013 500P, where<\/p>\n
Q = the number of cookbooks sold per month<\/p>\n
P = the retail price of books.<\/p>\n
Show what the demand curve would look like for price between $25 and $35.<\/p>\n
Address the following questions:<\/p>\n
Suppose that you expect to sell about 22,000 cookbooks per month online, and assume your overhead, technology, and equipment costs are fixed. What are your total costs?<\/p>\n
Is the business worth pursuing so far?<\/p>\n
What market structure have you entered, and why?<\/p>\n
What can you do to guarantee success in this market?<\/p>\n
What pricing strategy might you use?<\/p>\n","protected":false},"excerpt":{"rendered":"
You are starting your own Internet business. You decide to form a company that will sell cookbooks online. Justcookbooks.com is scheduled to launch 6 months from today. You estimate that the annual cost of this business will be as follows: Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-72750","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/72750","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=72750"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/72750\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=72750"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=72750"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=72750"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}