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A German manufacturer sells industrial equipment and service contracts for that equipment. There are five market segments. The figure below shows the size of each
A German manufacturer sells industrial equipment and service contracts for that equipment. There are five market segments. The figure below shows the size of each market segment and the amount each segment will pay for the equipment separately, service contract separately, or the bundle of equipment + service contract. The variable cost is $425 for equipment and $300 per service contract. What set of prices maximize profits? Bundle Costs $725 Group Size 1 Equipment $425 Equipment Use Max $1,200 $650 $700 $825 $975 200 225 125 300 475 Service $300 Service Contract $400 $375 $325 $600 $500 Bundle Max $1,350 $950 $950 $1,350 $1,400 3 4 5 Type Optimal Prices Here]
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