1. Your company sells project management software aimed at the European market and billed as an analytics-based risk mitigation solution. It is available in base- and high-quality versions called Pura Suerte and Gran Suerte, respectively. Each potential buyer is interested in buying one unit of the Suerte software (either Pura Suerte or Gran Suertebut not both).

Through marketing research, you learned the potential buyers' willingness to pay (WTP) for each version of the Suerte software. There are an equal number of potential buyers of Type A and Type B, so for simplicity we will consider there to be a single Type A buyer and a single Type B buyer.

Since development costs are sunk, your objective is to maximize the total revenue from selling the software. You do not know the WTP of any individual buyer, so you must post one price for Pura Suerte and another price for Gran Suerte. Buyers see the prices and may choose to: 1) buy Pura Suerte, or 2) buy Gran Suerte, or 3) buy neither... whichever decision maximizes their consumer surplus. Below, please solve for the optimal prices. Show intermediate steps and clearly explain your reasoning. (12 points, 4 points each)

Potential Customers' WTP
	Pura Suerte	Gran Suerte
WTP of type-A buyer	1250	2500
WTP of type-B buyer	0750	1000

1. If you only sell one version, Gran Suerte, what is the optimal price? Given this price, which buyer(s) would buy, and what is your revenue?

1. If you sell both versions, Pura Suerte and Gran Suerte, what is the optimal price for each? Given these prices, which buyer would buy which version, and what is your optimal revenue?

c) Is it optimal to sell both versions?