Question
Daenerys' company produces two versions of a software program, Advanced and Basic. There are 3 segments of customers, the Managers, Executives and the Students, and
Daenerys' company produces two versions of a software program, "Advanced" and "Basic". There are 3 segments of customers, the Managers, Executives and the Students, and the respective segment sizes are 2000, 1000 and 5000 respectively. The per-unit cost of producing the Advanced version is $30, while the per-unit cost of producing the Basic version is $15. The willingness to pay (WTP) for each version, by segment, is given as follows:
WTP (Managers) = $88 (Advanced) and $58 (Basic)
WTP (Executives) = $62 (Advanced ) and $45 (Basic)
WTP (Students) = $47 (Advanced ) and $33 (Basic)
a. If Daenerys sells only 1 version, which version should she sell and what is the optimal price? What is the optimal profit of the company?
b. If Daenerys decides to sell both versions, what are the optimal prices she should charge for each version? What is the optimal profit of the company?
show work pls
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