Price Demand

The Will Bury Scenario is an exercise in understanding basic economic principles. The most basic of these principles is the concept of supply and demand. In the case of Will Bury there are many factors that will influence the amount of demand for his product. His text and audio file book format although unique in some ways have many alternative products already contending for this demand. He will be contending against traditional paper bound books, Digital file format books or (e-reader) and books on tape. His product is unique in that it both provides an audio and text format of the publication the question is are the people buying audio books also the ones who want a digital copy and do the customers looking for a digital file find a benefit in also obtaining an audio file.

Will is introducing his product at a good time. There is a huge increase in complimentary products. According to the Wall Street Journal tablet pc’s will have “a compound annual growth rate of 66.5%” over the next 3 years. Additionally e-reader devices and small audio devices have flooded the market. Most current phones could both play the audio files and display the text files.

Will also needs to consider his supply. He is considering hiring students to “digitize” books so he can run them through his software to produce the audio and text files. This would be a huge mistake and a waste of valuable resources. Over the last few years there has been an enormous project to compile and share as much knowledge and books as possible. This has resulted in millions of books already having been scanned and “digitized”. Utilizing a higher wage employee with more advanced computer skills Will should be able to produce his audio files from already existing digital images for much less per book. With a lower cost of production Will can either achieve greater margins or lower his selling price and shift his supply curve.

Because of the large amount of alternative goods available in the...