What_Is_Economic

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 cautious as to how much he should increase the price in his newer literature or else he will lose consumers and he will lose money. With price elasticity of supply and demand, Will's product price is elastic. He may need to take steps to get his digitized books into an inelastic state. He must determine how much he can raise the prices of his newer digitized literature without losing consumers. One way he may be able to increase income is by reducing his production of the older lapsed copyrighted material by 50% and increase his newer copyrighted material output by 25%. He can then increase the price of the newer literature to gain a profit. This is assuming the Will has put in place a detailed marketing plan that will maximize exposure of his product. In conclusion, having a unique perspective on economics is understanding the concepts of supply, demand and price elasticity. Success or failure of a business is often determined by informed decision making based on these factors.