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Posted by <normanstrong on 03/18/06 18:16
"(PeteCresswell)" <x@y.Invalid> wrote in message
news:p0fo12tf5m9ooilb3nqjq96fnei90c8veb@4ax.com...
> Anybody else noticed that the price of DVDs in the "Bargain Bin" at their
> local
> Circuit City has been fluctuating over the past few months?
>
> I've seen it move between $6.99 and $10.00.
>
> I'm wondering if somebody is exploring the price limits of impulse
> purchase or
> something like that.
I wouldn't be at all surprised if what you suggest is true. Exploring
profit v. price is a common subject of study. I've seen curves that plot
the total dollars of profit against the price of the goods. As you might
expect, increasing the price decreases sales, but it may still result in
higher total profit dollars. At some price, the manufacturer (or retailer)
will make the most money. Most companies set the price above the peak
return, since it reduces inventory risks, and it leaves plenty of room for
markdowns.
I have mixed feelings about this process, since it fails to take into
account the value of providing many more people with the enjoyment of the
product.
Norm Strong
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