Will Bury

Will Bury’s Proposal

ECO/561 Economics

April 22, 2013

Joe

Will Bury’s Proposal

This business proposal is created to provide recommendations to Will Bury in an effort to increase revenue and the ideal production levels for Will Bury. Included in the proposal will be recommendations to assist Bury in adjusting fixed and variable costs to maximize profit while identifying methods to reduce costs. It will also include the processes used in creating the recommendations and some economic concepts relative to the recommendations.

Will Bury is an inventor who has been working out of his garage for the past few years and maintaining a fulltime position with High Tech Digital Industries. Bury has developed and patent proprietary technology that takes the printed word from text materials and creates a file with the option of reading it digitally or listening to it with a realistic synthetic voice. Bury has free access to books no longer under copyright protection and he can cover the $5.00 royalty fee per book for the copyrighted books. Bury has been digitizing all the books himself but he feels that he could get more work done and faster if was to hire a person.

Market Structure

The recommendation process starts with identifying Bury’s market structure. Identifying the market structure allows the pricing strategy to happen, maximizing revenue, as well as profits. Once the costs are known and divided into fixed and variable, charting can happen to graph marginal revenue and cost, average total variable, fixed and total costs.

Since Bury has patented the technology to produce digitize books and there are no other companies presently offering this type of product makes Will Bury’ market structure a monopoly As a monopoly, Bury has the price setting power but needs to be careful not to out price the consumers. To maximize profits and increase profit, Bury needs to set the individual prices in which marginal costs = marginal revenue (McConnell, Brue &...