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How do I determine a quantity discount schedule? Congratulations! You have inherited the complete rights for ten songs from the late Prince's estate. You are

How do I determine a quantity discount schedule?

Congratulations! You have inherited the complete rights for ten songs from the late Prince's estate. You are planning to createa new website where users can pay and download these songs. How to price these songs?

As a good marketing analyst, you elicited 1,000 potential buyers' willingness to pay for these songs. These consumers are a very good representation of the potential market for these songs. Please look at MS Excel file "Songs Data.xls" that shows 1000 consumers' maximum willingness to pay for these 10 songs. For example, customer 5 is willing to pay up to $1.76 for song 3.

2d. Determine a quantity discount schedule that maximizes the revenue (e.g., if a customer buys up to 5 songs, she pays $ 2.5 per song and thereafter $0.75 per song). What is the revenue under quantity discount? How many songs get sold? What is the revenue improvement over the single price format in 2a?

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