Albatross Software Has Two Main Products: WindSong Is a Program

question 47

Multiple Choice

Albatross Software has two main products: WindSong is a program that can be used to edit audio files and SunBurst is a program that can be used to edit digital photos. The two major types of customers are small businesses and home users. The small business customers have a reservation price of $300 for WindSong and $450 for SunBurst. The home users have a reservation price of $100 for WindSong and $125 for SunBurst. Which of the following statements is true?

• A) Bundling the two software products is not likely to be profitable because the marginal cost of producing software is positive by very small.
• B) Bundling the two software products is not likely to be profitable because the consumer demands are homogeneous.
• C) Bundling the two software products is likely to be profitable because the demands are negatively correlated.
• D) Bundling the two software products is not likely to be profitable because the demands are positively correlated.

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Definitions:

Continental Shelf

The extended perimeter of each continent, lying relatively shallow in the ocean, where the seabed is at a gentle slope before a steep drop off to the ocean floor.

Passive Margin

The transition between oceanic and continental lithosphere that is not an active plate boundary.

Oceanic Crust

The relatively thin part of the Earth's crust that underlies the ocean basins, composed mostly of basalt and gab-bro.

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