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Business Proposal Essay

Market Structure and Elasticity

The elasticity depends on if in a year Google sells over one million and stays under the competitor price of $80 dollars by Belkin Miracast then it can fluctuates it price to $50 per Chromecast. The elasticity of demand is once a manager knows the marginal cost, they should then set the price over marginal cost. This is the profit that the product will produce. The industry for Chromecast is to allow people the choice to go beyond the monopolistic competitive market structure such as Comcast to a lesser monopolized substitution for cable: Chromecast.

Pricing Strategy based on Market Factors Having a strategy for Chromecast will address the competition and the day to day operations. Using cost leadership, differentiation and having focus will allow the pricing strategy to affect marginal cost and allow you to profit by selling more of the lower price item to focus in a on a smaller audience which will provide revenue in the future due to the differentiation that you have for your product and stepping out amongst your competitor to offer the lower price for the Chromecast. How will changes in the quantity supplied as a result of your pricing decision affect marginal cost and marginal revenue?

Changes in Revenues and Costs Lead to Changes in Profits

(Markup Pricing, 2014)

We see here that if a company changes their price, it can lead to changes in the cost and revenue, the profit is equal to the change in revenue minus the change in cost—that is, the change in profit is marginal revenue minus marginal cost. When marginal revenue equals marginal cost, the change in profit is zero, so a firm is at the top of the profit hill (Markup Pricing, 2014).

Non Pricing Strategy

The non-pricing strategy can be used for Chromecast to gain sales due to many customers valueing quality over cost, consumers want to know that if they pour money into something that they are getting what they paid for and expect more from the product than they paid for. The non pricing strategies that will be used in determinning the increased barrier to entry from the normal price slashing will be network effects, compactability to be able to ownership of control of a key resource, high set up cost, advertising, and finally having a strong brand. Having a pricing entry of $35 dollars is an impluse to buying the device, but the non pricing strategy can be the most potent strategic weapon, “Chrome is a focus at Google; Android is an afterthought,” (Keizer, 2013). Another non pricing strategy is the simplicity rules that Chromecast leverages demonstrable consumer behavior with wireless media recievers, and marries that with the mobile ecosystem (PBS, 2014).

Economic cost concepts and how could changes in your business operations alter the mix of fixed and variable costs in line with your strategy? Everything has a cost, deciding on if that cost is something a company can control can be a challenge to the business, looking at fixed cost and variable cost, such as interest paid back on a car loan it’s the same. Can the money be controlled such as fixed cost, or does the needle money the money for a variable amount. A few examples of a fixed cost is rent on a building to be able to make the product and depreciation over time. This can lead to knowing what the cost will be advance for the product and how it factors into the profit will lead a company to understanding more about their product and the overall outcome of how it affect the budget.

A few variable cost involved with the product can have a cost of labor, this can change due to the experience of the workers and overtime that meets the demand of the time sensitive product to release to the world. Cost of labor can change and factoring this into your budget is a must to formulate your budget, hence every year cost of labor goes up if you give raises or bonuses. Another demanding variable cost is the shipping and delivery charges, if your are shipping all over the world and products have to go thru customs, then the price goes up, factoring a baseline for the product will help a business calculate the plan for the business and allow a budget to be factored into the everyday profits that the product produces.


Overall, Chromecast is a product of Google and allows a choice for the over demanding cable industry. Giving your customers a choice promotes respect and loyalty, in this business proposal the topics of economic principles were presented and statements about the market structure and the elasticity of demand for the good or service. Chromecast is a thumb- sized media streaming device that plugs into the HDMI port on your TV. Set it up with a simple mobile app, then send your favorite online shows, movies, music and more to your TV using your smartphone , tablet or laptop. Chromecast is remote free and as simple as a plug and play and only cost $35. In this business proposal the market structure and elasticity of the product was identified, the following questions were answered: How will pricing relate to elasticity of your product?

How will changes in the quantity supplied as a result of your pricing decisions affect marginal cost and marginal revenue? Besides your pricing decisions, what are your suggested nonpricing strategies? What nonpricing strategies will you use to increase barriers to entry? How could changes in your business operations alter the mix of fixed and variable costs in line with your strategy? The proposal demonstrated an understanding of the uses of product differentiation by not allowing certain content to be streamlined to your television and native apps or services installed in the product (Google, 2014).

Google. (2014).
Keizer, G. (2013). Computerworld. Retrieved from http://www.computerworld.com/s/article/9241170/With_Chromecast_Google_reveals_Chrome_as_its_strategic_big_gun

Markup Pricing. (2014). Retrieved from http://2012books.lardbucket.org/books/theory-and-applications-of-microeconomics/s10-04-markup-pricing-combining-margi.html

McConnell, C. R., Brue, S. L., & Flynn, S. M. (2009). Economics: Principles, problems, and policies (18th ed.). Boston, MA: McGraw-Hill Irwin.

PBS. (2014). Retrieved from http://www.pbs.org/mediashift/2013/07/5-reasons-google-chromecast-will-transform-tv/

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