On Apr 9, 11:52 pm, "Michael J. Mahon" <mjma...@aol.com> wrote:
And as the price comes down, the number of sales goes up.
Pricing theory is about finding the price which will, as a
result of this "elasticity" of the market, maximize total
profit.
Since all the effort required to make all the copies (except
plopping a $0.20 DVD in a burner) is already spent, the question
isn't how much trouble it was to create it, but how much it's
worth to the largest number of potential buyers.
Put another way, "sunk cost" is irrelevant.
A well-worn rule of thumb is that the price that marks the
start of the "impulse buy" range is the price of a pizza. ;-)
So I'm guessing that if the price dropped to $24.95, he'd
sell over a hundred of them--all but $1 + $1 postage would
be *pure profit*!
(BTW, I already bought mine. ;-)
-michael
NadaPong: Network game demo for Apple II computers!
Home page: http://members.aol.com/MJMahon/
"The wastebasket is our most important design
tool--and it's seriously underused."
Michael,
You're right about sales going up as the price comes down. Now that
they are more reasonably priced I think I'll "suggest" the DVD to my
wife as a Christmas present for me. She says she has trouble buying
things for me and this is something that I'd like to have and the
price is more reasonable now. Of course there's also the possibility
of either the CFFA card or the IIGS Microdrive IDE controller, either
of them would make my GS a lot easier to use. Decisions,
decisions ;-).