Question
Consider a modified problem from class. The firm is still selling two pieces of software: a word processor and a spreadsheet. There are three types
Consider a modified problem from class. The firm is still selling two pieces of software: a word processor and a spreadsheet. There are three types of consumers: writers, accountants and students. Writers value the word processor at $50 and the spreadsheet at $0. The accountants value the spreadsheet at $50 and the word processor at $0. Students willingness to pay is $30 per piece of software. There are 6 writers in the market, 6 accountants and N students. Find the prices the firm would quote for every piece of software in the absence of bundling and the resulting profit (your answer could depend on N). Then find the prices it would quote and its profit if it decides to offer a package consisting of the two programs along with individual programs.
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