The Following Table Contains Different Consumers' Values for Three Software

question 30

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:

• 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:

Cohen's D

A statistic used to quantify the difference between two group means relative to the standard deviation of the sample.

Cohen's D

A measure of effect size that quantifies the difference between two group means in standard deviation units.

Cohen's D

A measure of effect size indicating the standardized difference between two means, often used in psychological and educational research.

Standard Deviation Units

Units of measurement used to express the variability or dispersion of a set of data points around their mean in terms of the standard deviation.