Evans 2-man manual

[Kevin Finnerty]

Originally Posted by DG

I don't have an MBA but I have a calculator. Let's say the book costs $20 to produce and sells for $70. If 1000 are sold the "profit" is $50,000. Revenue is $70,000, but revenue is not the goal, profit is the goal.

Let's say we cut the price in half, the book still costs $20 to produce and if twice as many people buy it due to half off price the Revenue is $70,000 and profit is $30,000. Sales would have to more than triple (3.3333 to be exact) to get the same profit for a price cut in half.

I also expect that the more books are produced the production costs are lowered, but production costs would have to be cut in half for half price reduction in purchase cost and corresponding doubling of purchases to result in same profit.

I fully understand your standpoint, because it's mine. But have you seen this book? The production was somewhat cut-rate. It did NOT cost $20.00 to produce. Not close, really. That's the initial reasoning behind my contending that it should be sold at a lower price---it's not a very high quality (or costly) publication.

I guess we should all be glad it's cheaply made or we'd all be paying $120.00 or so.

[DG]

Originally Posted by Kevin Finnerty

I fully understand your standpoint, because it's mine. But have you seen this book? The production was somewhat cut-rate. It did NOT cost $20.00 to produce. Not close, really. That's the initial reasoning behind my contending that it should be sold at a lower price---it's not a very high quality (or costly) publication.

I guess we should all be glad it's cheaply made or we'd all be paying $120.00 or so.

It was math lesson and a point about difference between revenue and profit, nothing more. I have not seen it.