MICROECONOMIC ANALYSIS OF A PROPOSAL TO
A. Examination of the economics of the industry.
1. How the industry works.
a. Production/distribution structure.
2. Conditions required for profitability.
B. Assessment of demand for video tape rentals.
2. Tape rental price vs. purchase price.
3. Effects of cable, and network television.
4. Industry demand projections.
a. Factors affecting demand.
1. Types of tapes rented.
1. Number and type of video rental outlets.
a. Video rental stores.
b. Supermarket departments.
c. Other (including convenience stores).
2. Experience in local market.
(1) Factors affecting demand.
(2) Demand curve for the firm.
d. Pricing considerations.
(1) Non applicability of marginal concepts.
III. MARKETING AND FINANCIAL PROJECTIONS FOR VENTURE.
B. Profitability projections.
This research presents a microeconomic analysis, the aim of which is to ascertain the probable profitability of the establishment of a prerecorded video cassette tape rental store. The results of this analysis are presented in three major discussions, which (1) assess the industry, (2) assess the local market, and (3) provide marketing and financial pro jections for the venture. The presentation concludes with a recommendation regarding the establishment of a prerecorded video tape rental store.
The assessment of the industry is made in two contexts. First, an examination is made of the economics of the industry, and second, prerecorded video tape rental demand is assessed.
Examination of the Economics of the Industry
The prerecorded video cassette tape industry is heavily dependent upon full length motion pictures recorded on vi...