Problem 12

| | | \\ | | | | | _ Problem 12 You are the monopoly seller of computers and monitons. Remarkably, the '!_ costs of production for both products are zero. You sell to a market consisting of two '!_ segments (A and B). The RP's of each segment for computers and monitors are shown in 'l the table below. _ There are on equal number in each segment. Note that a buyer could choose to buy one " product and not the other.2 V 1. If you were selling computers and monitors separately, what price should you charge V for each to maximize revenue? 2. If you were to bundle the computer and monitor together and sell only the bundle, what price should you set to maximize revenue? (As in class, assume a buyer '3 RP for a bundle is the sum of the RP's for the two items.) _ 3. Could you genemte more revenue than in parts (I) and (2) through mixed bundling? 3r 2If you nd this strange, imagine that the buyer has an old monitor or computer that is working. | | | \\ | | | | | _ Problem 13 Soma cable has a educational channel and a music video channel. The viewing audience consists of two segments (A and B). The table below shows the segment sizes, their :RP's for each channel. ~ - Educational Segment Size m $11 $11 6000 Soma incurs a cost of $5 per channel for each customer. _ 1. If it said each channel separately, what price should it set on each to maximize prot? 2. If it sold the two channels as a bundle, what price should it set on the handle to maximize prot? 3. Could Some generate mom prot through mixed bundling? If so, how should they price? | | | | | | \\ \\ | u s a any rm in ng o u mus a number of plants: 0, 1, 2, etc. Building Q plants costs a rm 3.5 x Q dollars. Each plant produces one unit of SOMA. If Firm 1 builds Q1 plants and F lrm 2 builds Q2 plants, then the market price p for one unit of SOMA will turn out to be 9 (Q1 +Q2). For example, if Firm 1 builds 2 plants and Firm 2 builds 4 plants, the market price will be 9 (2 + 4) = 3 per unit. At this price Firm 1 will make a prot of2 x 3 2 x 3.5 = 1 while Firm 2 will makeapmt of4x34x3.5= 2. I. If there was a single rm capable ofproductng SOMA, hour many plants would it install to maximize pmt? 2. Suppose now there one two rms (aware of each other) capable of producing SOMA with the technology described above. Each chooses the number of plants its must build independently of the other and at the some time. What is the equilibrium number of plants that will he built by each? 3. Suppose that Firm 1 builds before Firm 2 (Firm 1 is awane that Finn 2 will decide after Finn 1 decides). How many plants should Firm 1 build and what will Firm 2's reaction be? 103 103 unloaded by XanEm User") 761547 on mm. Kelogg School of Manageaml. James Schumann Fall 2020, EMBA122