Question

Use the following table to answer Question 2. Market research estimates the maximum value for each of two goods by three customer types (segments). These values are the entries in the table. Assume that the cost of production is zero and the seller need only maximize revenue. Assume further that each consumer will purchase each good as long as the price is less than or equal to his/her valuation. You are hired to evaluate the pricing options available to the seller. Customer Type 1 Customer Type 2 Customer Type 3 Good 1 $2,300 $2,800 $2,900 Good 2 $1,700 $1,200 $1,000 1. What prices yield the highest revenue if the goods were only sold separately? Show the price for each good and the total revenue. 2. What would be the price charged for under a pure bundling strategy and what revenue results? 3. What would be the prices charged under a mixed bundling strategy and what revenue results? 4. What pricing strategy would you recommend to the company and why?

Answer 1

Page N 8500+1960° 4000 8004 1200 : 4000 8900lo0o 300 300 IcHoo 1800 oo0 880 0 Good 8300, all 3 pathcipate, then 300 x3: G900 $ buy the Good, 2 y #2&#3 r-a Pas ticipate 800i on . go charse 300 TR 6000 fn Good2) P-lo al3 buy Sood, E 100o x3 $3000 TT: 1200 x 2-8400 P: 120 o, · 1000T; 3000 3) Rure bundleng change fhundle 3too, lo al3 tyre buy -Ang TRIlYoo charge P-39001 dhus undle-4000 Andvidual Good guicing P $8400 $1800 elds fièhet Revarue 3 UMe Pune bundubg a