Question
You are a pricing analyst for QuantCrunch Corporation, a company that recently spent $15,000 to develop a statistical software package. To date, you only have
You are a pricing analyst for QuantCrunch Corporation, a company that recently spent $15,000 to develop a statistical software package. To date, you only have one client. A recent internal study revealed that this client's demand for your software is Qd = 300 - 0.2P and that it would cost you $1,000 per unit to install and maintain software at this client's site.
The CEO of your company recently asked you to construct a report that compares (1) the profit that results from charging this client a single (profit-maximizing) per-unit price with (2) the profit that results from charging $1,450 for the first 10 units and $1,225 for each additional unit of software purchased.
Answer the following questions:
- What type of pricing strategy is (1)?
- What type of pricing strategy is (2)?
- Compare at least three strategies discussed in this module (including 1 and 2) in making your recommendation? Show your calculations.
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