(Table: Consumer Valuations for Two Software Programs I) Assume That

question 141

Multiple Choice

(Table: Consumer Valuations for Two Software Programs I) Assume that the marginal cost of producing software is zero. If the firm priced and sold each program separately, it would earn total revenues of _____, while a pure bundling strategy would generate the firm total revenues of _____.

• A) $450; $900
• B) $380; $450
• C) $700; $760
• D) $600; $660

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Definitions:

Profit Margin

A financial metric used to evaluate a company's profitability by comparing net income to revenue.

Merchandising Company

A business that purchases goods at wholesale and sells them at retail prices, typically consisting of activities involving buying and selling without significant alteration of the goods.

Periodic Inventory System

An inventory management method where the inventory count is conducted at specific intervals to determine the cost of goods sold.

Statement Of Income

A financial document that reports a company's financial performance over a specific period, detailing revenues, expenses, and net income.