Question
EasyTax markets both a deluxe and a standard version of its software. The deluxe version contains additional features that are likely to appeal to sophisticated
EasyTax markets both a deluxe and a standard version of its software. The deluxe version contains additional features that are likely to appeal to sophisticated users. The marginal costs of producing and distributing the two versions are virtually equal to zero, and the market is equally divided into two types of users, sophisticated and unsophisticated. The maximum willingness to pay for both types of users for the standard and deluxe versions are given in the following table
willingness to pay
user type standard deluxe
unsophisticated 20 20
sophisticated 35 100
Assume that the company cannot distinguish between the two types of user. What are the optimal prices for the two versions?
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Statistics For Engineers And Scientists
Authors: William Navidi
3rd Edition
73376345, 978-0077417581, 77417585, 73376337, 978-0073376332
