. Eastman Publishing Company is considering publishing a paperback textbook on spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and production setup is estimated to be $160,000. Variable production and material costs are estimated to be $6 per book. The publisher plans to sell the text to college and university bookstores for $46 each. a. If the publisher believes that the price per copy could be increased to $50.95 and not affect the anticipated demand of 3800 copies, what action would you recommend? What profit or loss can be anticipated?
. Eastman Publishing Company is considering publishing a paperback textbook on spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and production setup is estimated to be $160,000. Variable production and material costs are estimated to be $6 per book. The publisher plans to sell the text to college and university bookstores for $46 each. a. If the publisher believes that the price per copy could be increased to $50.95 and not affect the anticipated demand of 3800 copies, what action would you recommend? What profit or loss can be anticipated?
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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1. Eastman Publishing Company is considering publishing a paperback textbook on spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and production setup is estimated to be $160,000. Variable production and material costs are estimated to be $6 per book. The publisher plans to sell the text to college and university bookstores for $46 each.
a. If the publisher believes that the price per copy could be increased to $50.95 and not affect the anticipated demand of 3800 copies, what action would you recommend? What profit or loss can be anticipated?
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