BB software markets two software-applications (X and Y) for businesses, developer, and individual consumers. The products are directly downloaded from the web so there is no variable cost associated with the production of new copies. Each customer needs only one copy of each product. BB knows that there are four segments in the marketplace. The size of the four segments and their reservation prices for the two products are as follows:

Suppose that BB started advertising product Y to the various segments which changed their perception of it. As a result the reservation prices for the four segments for Y became the following. The reservation prices for x remained the same.

What would be the new optimal price for Y and the optimal price for a pure X + Y bundle? Does bundling make sense in this case as well? Explain why.

Segment 1 2 3 4 Size 2 3 2 3 Reservation Price (X) Reservation Price (Y) 8 2 6 4 1 5 6 8 Segment 1 2 3 4 Size 2 3 2 3 Reservation Price (X) _Reservation Price (Y) 8 6 4 1 7 5 3