The Following Table Contains Different Consumers' Values for Three Software

question 121

Multiple Choice

The following table contains different consumers' values for three software titles: PowerPoint,Excel,and Word.Suppose there are 100 consumers of each type.It costs Microsoft $5 to produce each piece of software.If Microsoft wants to devise a pricing strategy that is incentive compatible between consumer types and will maximize its profit,then it should:
$\begin{array}{|l|l|l|l|}\hline \text { Consumer Types } & \text { PowerPoint } & \text { Excel } & \text { Word } \\\hline \text { Accountants } & \$ 75 & \$ 100 & \$ 150 \\\hline \text { Marketing/Sales } & \$ 125 & \$ 80 & \$ 135 \\\hline \text { Administrative Assistants } & \$ 50 & \$ 175 & \$ 75 \\\hline\end{array}$

• A) charge $50 for PowerPoint, $80 for Excel, and $75 for Word.
• B) charge a single price of $300 for the bundle of PowerPoint, Excel, and Word.
• C) charge $125 for PowerPoint, $175 for Excel, and $150 for Word.
• D) charge $325 for the bundle of PowerPoint, Excel, and Word and permit consumers to purchase each software title individually at $81.10 each.

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Definitions:

Business Problem

a challenge or issue faced by a company that demands resolution for operational or strategic success.

Easy Answer

A solution or explanation that is readily available and does not require much thought or effort to understand or implement.

Two Main Theories

A general statement referring to the most prominent or widely accepted theories within any given field of study.

Profit-generating Product

A product that significantly contributes to a company's revenues exceeding its costs, thereby creating a profit.