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Pricing in "Broke" - The Office
by Dirk Mateer `

The Office provides an amusing episode devoted to the discussion of costs. Michael Scott establishes his own paper company to compete with both Staples and his former company, Dunder & Mifflin. He outcompetes his rivals by keeping his fixed and variable costs low. In one inspired episode, the Michael Scott Paper Company uses an old church van to deliver paper and the business operates out of a single room. This means the company has very low fixed costs, which allows it to charge unusually low prices. Michael Scott keeps variable costs to a minimum by hiring only essential employees and not paying any benefits, such as health insurance. As we will discover in the upcoming chapters, firms with lower costs have many advantages in the market. Cost matters because price matters. Firms that have lower costs can keep their prices lower to attract additional customers.

This Commentary is related to the following Clips:
Pricing in "Broke" - The Office by Created by Ricky Gervais and Stephen Merchant, Developed by Greg Daniels, Directed by Steve Carell (2009) Michael Scott starts his own paper company with an unsustainable pricing model.