Question 1 David del Ser is the chairman of Frogtek, a company he co-founded in 2008 with classmate Mark Pedersen while the two were students at Columbia Business School. Frogtek's main product - Tiendatek - is a point-of-sale software application, delivered via a computer tablet with a barcode reader attached, that helps small business owners manage inventories, optimize reorder decisions, and otherwise more effectively manage their finances. Frogtek is looking to launch Tiendatek in Bogota. Tiendatek's software is developed, but they must acquire the hardware for the Bogota launch. David identified a manufacturer in Taiwan, Cipherlab, which will provide both tablets and barcode readers for a combined price of $120. David and Mark have polled the small business owners of Bogota to get a sense of how many Tiendatek systems they are likely to sell at different price points. They have divided their consumer market into ten groups (e.g., small supermarkets, convenience stores, kiosks, etc. would each be classified as a distinct consumer group). These groups vary in willingness to pay for the product and group size. Their polling data are given here, with each group labeled with a letter-A through J-sorted in descending order of WTP. (For simplicity, you can assume each member of the group has the same WTP, e.g. all 75 customers in group A would pay up to $400 for Tiendatek, all 125 customers in group B would pay up to $325 for Tiendatek, etc.) Group Category | Group Size : Willingness To Pay 75 $400 125 $325 90 $300 75 $280 140 $250 125 $225 175 $200 125 $180 100 $120 50 $50 (a) Given the cost of Tiendatek hardware, what price should David set for Tiendatek and how what quantity of Tiendatek sales should be targeted? Please provide supporting evidence for your recommendation and use the concepts of marginal revenue and marginal cost in explaining the rationale for why you chose this price and sales target