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?

MULTIPLE CHOICE 1. To survive in the highly competitive tablet market, Microsoft should have ensured that its pricing objective was: a. Specific. b. Attainable. . Measurable. d. Realistic. e. All of these. 7. Which of the following statements reflects the information effect of price? a. "I just got paid, so I'm going to go buy a tablet!" b. "Hmm...the Surface looks neat, but so does the Nexus 10." c. "I don't know if I can afford the Surface since it is $100 more than the Nexus 10." d. "If the Surface is $100 more expensive than the Nexus 10, it must be that much better!" e. "I can't wait to go home and try out my new Surface tablet!" 8. If Microsoft lowers the price of its Surface tablets but the company's revenue still goes down, demand for the Surface is: a. Elastic b. Inelastic C. Unitary d. Satisfactory e. Unknowable 9. Suppose