A key element of any business is determining the profit maximizing price of a good. Yet each price level will exclude some consumers who find the equilibrium too high and refrain from entering the market. If a similar product could be offered at a lower price it may lure the abstaining customers to consume, thereby increasing profits. For an industry that is flustering like the music industry, it is crucial new sales methods are found to continue growth and expansion. This paper evaluates an MP3 bundle as a modified product to attract new customers and encourage current customer to purchase more songs. Survey response data is used to determine a profit maximizing price at which to offer the modified digital song.
Bibliography : p. 54-57
Bachelor of Arts