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A firm that supplies maintenance on photocopiers can provide 2 versions of the service: Elite (E) and Regular (R). The marginal cost of each version
A firm that supplies maintenance on photocopiers can provide 2 versions of the service: Elite (E) and Regular (R). The marginal cost of each version is identical and for simplicity, we set it equal to O. There are two equally-sized buyer segments, A and B, with reservation prices for the 2 versions given by the table below: Elite Regular Segment A $100 $50 Segment B $40 $30 (Note: if a buyer is indifferent between buying the 2 versions, assume he or she buys the Elite) Which of the following pricing strategies would maximize the firm's Revenue? O Sell the Elite version at $80 and the Regular version at $30 O Sell only the Regular version at $30 Sell the Elite version at $100 and the Regular version at $30
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