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A car manufacturer is considering selling a standard and a deluxe version of an automobile. The manufacturer has identified two equally sized consumer segments. Their
A car manufacturer is considering selling a "standard" and a "deluxe" version of an automobile. The manufacturer has identified two equally sized consumer segments. Their values are given in the table below. The marginal cost of both versions is $ Which is the most profitable strategy.
Version
Consumer Segment A
Consumer Segment B
Standard
$
$
Deluxe
$
$
a Price the standard version at $ and the deluxe version at $
b Price the standard version at $ and the deluxe version at $
c Price the standard version at $ and the deluxe version at $
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