Scenario Concept ECO

Scenario Concept

Scenario Concept
In the next job, you will be working the scene of Carlos Cruz given for class ECO561. This scenario spoke of an idea of the Mr. Carlos Cruz, inventor and businessman discussed that in the near future all the books will be read in any place through digitization. Carlos thinks that the consumer would assist if their favorite books can be achieved in digital form in order to be able to read it or listen to them depending on your choice. Carlos saw that the trend would change to read in hard copy to have the books in digital formats or in audio format on different types of mechanisms such as readers or tablets. Cross wants to benefit from this trend and in turn is interested in developing its own technology to take advantage of the situation.
In economics, the concept of scarce resources, it is very important. According to “Investopedia” (2014), we can define a scarcity of a problem that arises because people have unlimited desires, but resources are limited. Due to the shortage, some trends and economic decisions must be made to allocate resources efficiently. In economic terms, the resources include land, labor, capital and entrepreneurial ability. All these terms can be summed up in one basic idea, as resources are limited, we must understand that we cannot have everything. Entrepreneurship comes into play and there is to decide how much can be achieved using less.

A comparison of these terms with the scenario, we can see that Carlos has different options for achieving the concept of the digitization of books. Carlos you can either continue doing the work itself and be less productive in other areas or outsource staff to help you to create your idea. In terms of the economy, we must look into 2 parts, micro and macro. In regard to the macro, the sale of books on can be a resource that generates good capital, but it must be borne in mind its direct competition, for example Amazon, Apple (I books) and Barnes and Noble. In terms of micro, we must take into account the costs of machinery (scanner), digitization programs, payroll cost of staff in order to manage the system, payment for copyright, among others. In addition, Charles has to be taken into account if it maintains the production to the digitization of books in Puerto Rico where the federal minimum wage is $7.25 per hour or outsource some company abroad that would pay at a rate of $2.00 per hour. Taking into account the salary per hour, you can see that for each hour paid in Puerto Rico is equivalent to 3.5 hours in abroad.
Taking into account what has been discussed above, we can calculate that if a book of approximately 500 pages takes about an hour in digitized, abroad would be paid $16 for every 8 books in comparison to Puerto Rico would be paid $58.00 dollars, a difference of $42.00 dollars ( +363 % ). In summary, digitizing books abroad would be more cost effective. For $58, we can digitize 29 books abroad in comparison to Puerto Rico that would result in only 8 books for that price, a difference of 21 books. This result gives us a margin to be able to pay the copyright royalties and shipping charges. In turn, allows you to Carlos to be able to have time to better organize their sales strategy.
Finally, the article sold is a rubber product, with a result of 1.33, we can increase their price and consumers will pay. Depending on the scenario, were sold twice the books new and more expensive. The consumer of this type of books is the one who pays for a reader around $350.00 dollars or an IPad than its current value is $450.00 dollars. This type of consumer does not like the hard copy book and prefer to pay more for a book that you can enjoy at any time without this you take too much space or a great weight to transport. Carlos can increase the price of the book to $25.00 dollars, making have a wide range of gain in order to increase their catalog and in turn offer a better service on your page. As soon as the books that are no longer under the protection of the rights of author, Carlos may choose to leave $10.00 dollars or create tenders with them. Example, we can put a book that just came out to $30.00 dollars and you can offer lower a book of this free group. Another example might be a book that is no longer under copyright protection, but the same whether you have a high demand, you can increase its price of $10.00 to $15.00 dollars.
The economy not only gives the tools you need to study the trends of consumers, it also gives you the tools to corporations of how to sell, distribute and market their products for consumption.

Reference
Investopedia. (2014). Retrieved from http://www.investopedia.com/terms/s/scarcity.asp
McConnel, C. R. & Brue, S. L. (2008). Economics: Principles, problems, and policies (17th ed.). Boston, MA: McGraw Hill/Irwin. Chapter 1.
University of Phoenix (2011). Carlos Cruz’s Price Elasticity Scenario.