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Consider that IBM manufactures two types of laptop computers, a 750 MHz computer and a faster 1.0 GHz computer. There are two segments of consumers

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Consider that IBM manufactures two types of laptop computers, a 750 MHz computer and a faster 1.0 GHz computer. There are two segments of consumers in the market: personal users and business users. The following table gives you the willingness to pay of the two segments for the two products. Assume that all costs of production are negligible. Table: Perceived Economic Value Personal Users Business Users Segment Size 60.000 40.000 IBM 750 MHz $ 500 $ 1500 IBM 1.0 GHz $ 750 $ 2500 1. If IBM were to use a single product policy for this market which product should they introduce and at what price? 2. If IBM were to use a product line policy of launching both products what will be the optimal price for both products and the profits achieved with the product line? 3. Can you list two factors which would make the product line policy even more profitable compared to the single product policy

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