Use Thomas Money Service Inc. scenario to write a 1,050-1,400-word business proposal to improve an existing good or service. Include assumptions about the elasticity of demand and the market structure for the company’s good or service. Analyze data to determine fixed and variable costs. Include rationale for the following questions: How will you increase revenue? How will you determine the profit-maximizing quantity? How could you use the concepts of marginal cost and marginal revenue to maximize profit? What information do you need to determine this? Without this information, how would you make a decision? What is your suggested mix of pricing and nonpricing strategies? Explain your answer. Can you create or increase barriers to entry? If so, how? How will you increase product differentiation? Are there other ways to minimize costs for the product? Format your business proposal consistent with APA guidelinesDocument Preview:
University of Phoenix MaterialThomas Money Service Inc. ScenarioThomas Money Service Inc. has been in business since 1940. It started out as a consumer finance company granting small loans for household needs. Over the following 5 years, the company expanded its services by issuing business loans, business acquisition financing, and commercial real estate loans. In 1946, the decision was made to branch out into equipment financing. A subsidiary named Future Growth Inc. (FGI) was established. This decision turned out to be very lucrative. Because of the end of World War II, society had a huge demand for construction and forestry equipment. Because of increasing demand for this type of equipment, FGI decided to make a very daring move in 1951 and purchased an equipment manufacturing company. Now they could build, sell, and finance their own brand of building and forestry equipment. FGI discontinued financing other brands of equipment.For 67 years, FGI had been able to truthfully state that they have continuously increased profits year after year, even during economic downturns, and have never laid off workers. This track record has allowed their stock to grow from $5.00 to $85.60 with six stock splits from 1975 to 1998. FGI has never issued bonds, and the present stock value is $35The current global downturn has caused the American economy to suffer. Oregon, Washington, and several other forestry states have encountered flooding, massive fires, and protest from animal activists. For the first time in FGI history, profits declinedâdown 30% from last yearâand they had to lay off one-third of their workforce. The falling economy has also caused a drop in new-home sales: sales dropped 30% from the prior year and additional declines are expected. This has caused a domino effect throughout the entire construction industry. Not all sectors, however, are being hit equally by the economy. Hospitals and nursing homes still have a demand for new buildings. Data There are…
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