This question is about determining a DVD\'s final retail price for Mrs. Doubtfir

Question

This question is about determining a DVD's final retail price for Mrs. Doubtfire (1993) movie. Assuming that its break-even  Point has already boon passed with Box Office sales, discuss why it is  possible to sell each DVD at current retail price $3 00 by considering its underlying cost structure. Robin Williams learns that keeping in touch with his children can be a drag in this hit comedy, Daniel Hillard (Wiliams) Is an eccentric actor who specializes in dubbing voices for cartoon character. Daniel is a kind man and a loving father, but he's a poor discillinarian and a shaky role model. After throwing an elaborate and disastrous birthday party for hit son, Daniel's wife Miranda (Sally Field) reaches the end of her patience and files for divorce. Daniel it heartbroken when Mianda Is green custody of the children, and he's only allowed to visit them once a week. Determined to stay m contact with his klds. Daniel learns that Miranda is looking for a housekeeper, and with help from his brother Frank (Harvey Fiersleln), a makeup artist, Daniel gets e job disguised at Mrs. Iphegenia Doubtfire, a stem but caring Scottish nanny, Daniel pulls off the ruse to well that neither his ex-wife nor his children recognize him, and In the process, he learns how to be the good Parent he should have been all along. However, Daniel also has to deal with the little matter of Miranda's new boyfriend, Stu (Pierce Brosnan). - Mark Deming. Rovi

Explanation / Answer

Break even point of DVD sales is already achieved. It means that the fixed cost of the whole mechanism to produce / market DVDs have already been recovered.

Also,

Under the cost structure of DVDs, there are following costs:

1.    Fixed cost

2.    Variable Cost

Since, the fixed cost is already covered, Pricing strategy should focus on setting up prices, that recover variable cost and it is well done at $3 price. Also, due to low price, demand will be high and higher sales will be achieved. Ultimately, the $3 price will help in maximizing revenue. Thus, $3 is a good price to sell DVDs.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.