The perspective on economics is a unique subject. It is through the perspective of economics or what is commonly termed an 'economic way of thinking' that often determines the success or failure of businesses. Three items of discussion in the economic perspective are, the law of supply, demand and the price elasticity of supply and demand. This paper will discuss how all three affect the Will Bury's Price Elasticity Scenario.
In the law of demand, the rule is that when consumers will buy more of a product when the price declines and less when the price increases (McConnell-Brue, 2004). Will's business of digital books has to take into account that his new technology is still in its infancy in the market. It is unrealistic for him to have a expectation of high demand for his product if only a small number of consumers know about it. The fact that he sold only 1000 older books that had the lapsed copyright and 2000 of the new books should be a telling trend for him. The older books are not high in the demand category. One of the possible reasons for this is that it might be that consumers are uninterested in the older literature and tend to be into the newer more modern writings. Will needs to determine the average age group of consumers who purchased the newer books and also do the same with those who purchased the older books. He may discover that most of the consumers who purchased the newer literature is from a younger age group while the older books were purchased by an older age group.
In the law of supply, the rule is that the price of a product will be lower if there is a large quantity of supply. The lower the quantity, the higher the price. Spending trends point that Will must dedicate much of his supply in the copyrighted digitized books and less with the lapsed copyrighted material. He may need to determine if it is more economical to lower the prices on the older literature while raising prices on the newer material. Will must be...