Suppose Mattel, the producer of Barbie dolls and accessories (sold separately), has two types of consumers who purchase its dolls: low-value consumers and high-value consumers. Each of the low-value consumers tends to purchase one doll and one accessory, with a total willingness to pay of $40. Each of the high-value consumers buys one doll and two accessories and is willing to pay $77 in total.

Mattel is currently considering two pricing strategies:

Strategy 1: Sell each doll for $20 and each accessory for $20

Strategy 2: Sell each doll for $3 and each accessory for $37

In the following table, indicate the revenue for a low-value and a high-value customer under strategy 1 and strategy 2. Then, assuming each strategy is applied to one low-value and one high-value customer, indicate the total revenue for each strategy.

Revenue fr low value custRevenue fr high value custTtl Revenue fr Strategy

$40 value, I Accessory$77 Value, 2 Accessories($)

($)($)

Strategy 1

$20 doll + $20 accessory $__________________ _$__________________________ __$________________________

Strategy 2

$3 doll + $37 accessory ___$_____________________ _$____________________________ _$______________________________

The strategy that generates the most revenue is strategy________(1 or 2)