BestBuy plans to have an end of the season sale on videogames and High Definition TVs....
BestBuy plans to have an end of the season sale on videogames and High Definition TVs. After a focus group study, their marketing team found that they have four different types of customers, each with their own respective reservation price. The reservation prices are as listed below:
|
Customer |
TV |
Videogame |
|
A |
$1000 |
$500 |
|
B |
$800 |
$450 |
|
C |
$600 |
$375 |
|
D |
$500 |
$300 |
For simplicity, assume that the marginal cost for producing any of these products is $0, and there is only one representative customer of each type.
(a) If BestBuy were to sell TV and videogames separately, what price should it set for each product in order to maximize its profit?
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