Question
Assume a software company developed supply chain management software which is of high quality. The company can of course downgrade the software to bad quality,
Assume a software company developed supply chain management software which is of high quality. The company can of course downgrade the software to bad quality, but with a fix cost ofc. Assume that there are 1000 customers, 70% of which would buy the software of high quality at $9,000, and that of bad quality at $4,000. The rest would like to pay $6,000 for the software of high quality and 3,000 for low quality. If it is impossible for the company to perfectly discriminate customers, what would be the best pricing strategy for the company? That is, under what conditions, should the company offer software of high quality only, software of low quality only, or both? (please provide a number for c)
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