# you are starting your own Internet business. You decide to form a company that will sell cookbooks o

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you are starting your own Internet business. You decide to form a company that will sell cookbooks online. Justcookbooks.com is scheduled to launch 6 months from today. You estimate that the annual cost of this business will be as follows: Technology (Web design and maintenance) \$5,000 Postage and handling \$1,000 Miscellaneous \$3,000 Inventory of cookbooks \$2,000 Equipment \$4,000 Overhead \$1,000 Part I Deliverable Length: 1 graph plus calculations You must give up your full-time job, which paid \$50,000 per year, and you worked part-time for half of the year. The average retail price of the cookbooks will be \$30, and their average cost will be \$20. Assume that the equation for demand is Q = 40,000 – 500P, where Q = the number of cookbooks sold per month P = the retail price of books. Show what the demand curve would look like for price between \$25 and \$35. Address the following questions: Suppose that you expect to sell about 22,000 cookbooks per month online, and assume your overhead, t

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15economiccsyou are starting your own Internet business. You decide to form a company that will sellcookbooks online. Justcookbooks.com is scheduled to launch 6 months from today. You estimatethat the annual cost of this business will be as follows:Technology (Web design and maintenance) \$5,000Postage and handling\$1,000Miscellaneous\$3,000Inventory of cookbooks\$2,000Equipment\$4,000Overhead\$1,000Part IDeliverable Length: 1 graph plus calculationsYou must give up your full-time job, which paid \$50,000 per year, and you worked part-time forhalf of the year.The average retail price of the cookbooks will be \$30, and their average cost will be \$20.Assume that the equation for demand is Q = 40,000 500P, whereQ = the number of cookbooks sold per monthP = the retail price of books.Show what the demand curve would look like for price between \$25 and \$35.Address the following questions:Suppose that you expect to sell about 22,000 cookbooks per month online, and assume youroverhead, technology, and equipment costs are fixed. What are your total costs?Is the business worth pursuing so far?What market structure have you entered, and why?What can you do to guarantee success in this market?What pricing strategy might you use?.Part IQuantity Demanded and Demand CurveThe quantity demanded at various point of price between \$25 and \$35 for a

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