Consider the following mini Case: (200-500 words)

"The Dropouts are a hypothetical punk band. The Dropouts paid $20,000 for their studio recording time and another $2,000 for copying and packaging their first 1,000 CDs. With a boxload of fresh CDs in hand (which, like punk bands, have become practically a thing of the past), they discuss how much to charge. Spike is the first to speak up. Twenty thousand divided by one thousand equals twenty dollars. We should charge twenty dollarswere not in it for the money anyways, he confidently reports. Needle corrects him. Twenty-two thousand divided by one thousand is twenty-two dollars. Shaft asks, But what about the cost of our instruments and equipment? We gotta add that $10 grand, too. But we bought those instruments five years ago, Needle retorts. After quite some time they all agree to go with Needles suggestion and charge $22 per CD. They hit the road and in between sets try to sell their CDs for $22 apiece. But in a market where CDs normally sell for $15 each, who is willing to pay an extra seven bucks for this unknown band? The parents, a brother, three cousins, and a few drunks at the shows. After a month, the Dropouts are left holding 978 CDs.

1. Evaluation their pricing decision. Are there any flaws in their thinking?
2. If they hired you as a consultant, what price would you charge for each of the remaining 978 CDs?