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1. Brain and Company is a consulting group that offers a fool-proof pricing and rev- enue optimization service guaranteed to deliver $2 million in benefit
1. Brain and Company is a consulting group that offers a fool-proof pricing and rev- enue optimization service guaranteed to deliver $2 million in benefit to a customer. It costs Brain and Company $500,000 to provide this service. Unfortunately, they have a competitor, Dissenture, that provides a similar, but somewhat inferior, ser- vice that only delivers $1.5 million in guaranteed henefit. It also costs Dissenture $500,000 to provide this service. a. When competing with Dissenture, what price does Brain and Company need to charge in order to guarantee that they win the business? Assume that neither Dissenture nor Brain will price below cost and that both of them know each other's costs and the customer benefits in each case. b. How would Brain's price need to change if it only cost Dissenture $400,000 to provide their service
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