MICROSOFTSurprising many in the tech industry, Microsoft became one of the latest entries into the tablet market with the release of the Surface RT in the middle of 2012 and the Surface Pro in early 2013. Running the Windows RT operating system and Windows 8 respectively, these tablets offer consumers a high-resolution display, a touch keyboard, a high-definition camera, and access to thousands of apps via the Windows Store.?There is much doubt among market experts that the Surface will succeed in finding any sort of firm place in the market. One major reason that other competitors to Apple's iPad found success is that they were priced lower than the iPad. The lowest priced full-sized iPad costs $499. Compare this to the price of comparable Android models?the Google Nexus 10 and Asus Transformer TF300 retail for at least $100 less. At a lower price for a similar level of functionality, it is not hard to see why many consumers prefer these iPad alternatives. The Surface RT, meanwhile, costs just as much as the iPad, while the Surface Pro can cost as much as $999!Microsoft estimated that it would sell 1 to 2 million units of the Surface RT in the last quarter of 2012, but it fell short at just 700,000. Because of these poor sales, Microsoft reduced the number of Surface RT units ordered from its producers by half. In the short-term, Microsoft's pricing strategy has been a failure. Will it eventually turn around as consumers become more familiar, and perhaps more desirous, of what the Surface can do? Or, will Microsoft need to adopt the pricing strategy of other companies and cut prices in order to compete with the iPad?

RUE/FALSE 1. The price of each Surface sold multiplied by the number of units sold equals the revenue Microsoft earns on the product. TRUE FALSE 2. Based on the case, it is safe to assume that Microsoft's initial supply of Surface tablets is higher than the public's demand for them. TRUE FALSE Microsoft's used a status quo pricing strategy for the Surface. TRUE FALSE 4. If each Surface Pro costs $499.50 to produce, Microsoft used keystoning to set the price of the device. TRUE FALSE 5. If Walmart offered to stock Surface tablets at its thousands of locations around the world-but only if Microsoft sold the tablets for $50.00 less than usual-Microsoft would likely agree to this pricing demand. TRUE FALSE