21; These shirts will be 50% cotton and 50% polyester. The finest quote I received that fulfilled the needs for this shirt was from the Identity Club!; a company that solely deals with the personalization of tee shirts. The firm’s prices for quantities of personalized shirts decreased with the bulk of the order. Because my needs were at one hundred shirts, the price of the shirts dropped from $8.25 a shirt to $7.70 per shirt(fig.1-1). This estimate takes into account the costs of using unlimited colors to accommodate the specifications of the shirt as well as the price of the shirt which is supplied by the designing company and their labor costs. PRICING STRATEGY AND PROFITSIn order to promote the optimal point of production of these shirts, I will first have to take a look at how much overall it will take to supply these shirts to my consumers. Then, based on that, I will have to decide how much I have to charge in order to make a profit. I stated already that the price that I am getting the shirts for is $7.70 a shirt. So, obviously, anything above that price would constitute a profit. Keeping in mind that I want to make a large profit yet, not discourage sales, I have to take into account people’s own reservation price. This is the highest price that a consumer is willing to pay for a specific good or service. My fixed costs would be $4.70 per shirt plus $3.00 for the ink and printing. Since each shirt is exactly the same, the otherwise variable costs of ink colors is also figured into the fixed costs. No cost is issued by this company for a set-up fee. By taking a poll of the Fraternity brothers of Sigma Alpha Epsilon, I came up with the average reservation price of $12 a shirt (fig. 1-2). By offering this shirt at this price, I will be able to bring in a total profit of $430 off the initial one hundred-shirt price. See, my price is $770 for the 100 shirts and my total revenue for the shirts sold at $12 ...
