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1. A computer hardware firm sells both laptop computers and printers. It has a large inventory of laptops and printers that it wants to sell, so it has no variable production cost. Through the magic of focus groups, their pricing team determines that they have an equal number of three types of customers, and these customers' reservation prices are shown in the table below: Printer 100 50 150 Laptop Bundle Customer Type A 800 900 Customer Type B 1000 1050 Customer Type C 600 750 a) If the firm were to charge only individual prices, what prices should it set for its laptops and printers to maximize profit? If the firm has only one customer of each type, how much does it earn in total?

1. A computer hardware firm sells both laptop computers and printers. It has a large inventory of laptops and printers that it wants to sell, so it has no variable production cost. Through the magic of focus groups, their pricing team determines that they have an equal number of three types of customers, and these customers' reservation prices are shown in the table below: Printer 100 50 150 Laptop Bundle Customer Type A 800 900 Customer Type B 1000 1050 Customer Type C 600 750 a) If the firm were to charge only individual prices, what prices should it set for its laptops and printers to maximize profit? If the firm has only one customer of each type, how much does it earn in total?

Microeconomics: Private and Public Choice (MindTap Course List)
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter11: Price-searcher Markets With High Entry Barriers
Section: Chapter Questions
Problem 14CQ
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b) After conducting a costly study, an outside consultant suggests that the company could make
more money from its customers if it sold laptops and printers together a s a bundle instead of
separately. Is the consultant right?
c) If the firm has only one customer of each type, how much does the firm each in total from pure
bundling?
 
 
1. A computer hardware firm sells both laptop computers and printers. It has a large inventory of laptops and printers that it wants to sell, so it has no variable production cost. Through the magic of focus groups, their pricing team determines that they have an equal number of three types of customers, and these customers' reservation prices are shown in the table below: Laptop Bundle Customer Type A 800 900 Customer Type B 1000 1050 Customer Type C 600 750 a) If the firm were to charge only individual prices, what prices should it set for its laptops and printers to maximize profit? If the firm has only one customer of each type, how much does it earn in total? Printer 100 50 150
Transcribed Image Text:1. A computer hardware firm sells both laptop computers and printers. It has a large inventory of laptops and printers that it wants to sell, so it has no variable production cost. Through the magic of focus groups, their pricing team determines that they have an equal number of three types of customers, and these customers' reservation prices are shown in the table below: Laptop Bundle Customer Type A 800 900 Customer Type B 1000 1050 Customer Type C 600 750 a) If the firm were to charge only individual prices, what prices should it set for its laptops and printers to maximize profit? If the firm has only one customer of each type, how much does it earn in total? Printer 100 50 150
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