Question
S You are the manager of a firm that produces products X and Yat zero cost. You know that different types of consumers value your
S You are the manager of a firm that produces products X and Yat zero cost. You know that different types of consumers value your two products differently, but you are unable to identify these consumers individually at the time of the sale. In particular, you know there are three types of consumers (1,000 of each type) with the following valuations for the two products: Consumer Type 1 2 3 Product X $ 90 70 40 Product Y $ 60 140 160 Check my work a. What are your firm's profits if you charge $40 for product X and $60 for product Y? (Instructions: Assume all customers purchase each product.) b. What are your profits if you charge $90 for product X and $160 for product Y? $ c. What are your profits if you charge $150 for a bundle containing one unit of product X and one unit of product Y? d. What are your firm's profits if you charge $210 for a bundle containing ove unit of X and one unit of Y, but also sell the products individually at a price of $90 for product X and $160 for product Y?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started