A publisher of a new novel has spent $250,000 setting the type. The publisher must
spend $1 million advertising the new book. It is now ready to print the book. For
practical purposes, as many books as they like can be printed. In deciding how
many copies to run,
a. does the cost of typesetting have any influence on the publisher’s decision?
Explain.
b. does the cost of advertising have any influence on the publisher’s decision?
Explain.
a. The cost of typesetting does not have any influence on the publisher's decision on how many copies to run. Typesetting is a one-time cost that is incurred before the printing process begins. Once the typesetting is completed, the publisher can print as many copies as they like without incurring any additional typesetting costs. The number of copies they decide to print will be based on other factors such as market demand, production costs, and sales projections. The cost of typesetting is already accounted for and does not impact the decision-making process for determining the print run size.
b. The cost of advertising does have an influence on the publisher's decision on how many copies to run. Advertising plays a crucial role in creating awareness and generating demand for the new book. The publisher will consider the cost of advertising as part of the overall budget and financial goals for the book launch. If the publisher plans to spend a significant amount on advertising, they would likely want to print more copies of the book to meet potential demand and maximize the return on their advertising investment.
However, it is important to note that the decision on the print run size is also influenced by other factors such as market demand, production costs, distribution channels, and sales projections. The publisher needs to strike a balance between the cost of printing and the anticipated demand for the book to avoid overprinting and incurring excess inventory costs or underprinting and potentially missing out on sales opportunities.