Question: Apple also offered a 32GB version of the iPhone 4 at $299. Variable costs for that version were $250. Besides its higher price, explain why

Apple also offered a 32GB version of the iPhone 4 at $299. Variable costs for that version were $250. Besides its higher price, explain why Apple would encourage customers to purchase the 32GB over the 16GB version.

Apple introduced the iPhone 4 in 2010 but still continued to offer the iPhone 3G. The 16GB base version of the iPhone 4 was priced at $199, with unit variable costs equal to $187. The iPhone 3G’s price had decreased to $99 by the time the iPhone 4 was introduced, and its unit variable costs were $65.

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