A computer hardware firm sells both laptop computers and printers. Through the magic of focus groups, their pricing team determines that they have an equalnumber of three types of customers, and that these customers' reservation prices are as illustrated in the figure below.Customer ACustomer BCustomer Cand a price for printers ofLaptop$750$950$650Assume for simplicity the marginal cost of production for laptops and printers is zero.If the firm were to charge only individual prices (not use the bundle price), what prices should it set for its laptops and printers to maximize profit? Assuming forsimplicity that the firm has only one customers of each type, how much does it earn in total?To maximize profit using individual prices, the firm should charge a price for laptops ofP= 650P= 100Printer$100$50$150Bundle$850$1,000$800(Enter your responses as whole numbers.)In turn, profit is = $ 2150 (Enter your response as a whole number.)After conducting a costly study, an outside consultant claims that the company could make more money from its customers if it sold laptops and printers togetheras a bundle instead of separately. Is the consultant right? Assume again that the firm has one customer of each type and that marginal cost is zero. How muchdoes the firm earn in total from pure bundling?The profit-maximizing pure bundle price is $(Enter your response as a whole number.)Pslong

The firm will be able to sell their product if the reservation price of the consumer is above their…

To maximize profit using individual prices, the firm should charge a price for laptops of p = 650 and a price for printers of p= 100 (Enter your responses as whole numbers.) In turn, profit is =$ 2150 (Enter your response as a whole number.) After conducting a costly study, an outside consultant claims that the company could make more money from its customers if it sold laptops and printers togethe as a bundle instead of separately. Is the consultant right? Assume again that the firm has one customer of each type and that marginal cost is zero. How much does the firm earn in total from pure bundling? The profit-maximizing pure bundle price is $ (Enter your response as a whole number.)

To maximize profit using individual prices, the firm should charge a price for laptops of p = 650 and a price for printers of p= 100 (Enter your responses as whole numbers.) In turn, profit is =$ 2150 (Enter your response as a whole number.) After conducting a costly study, an outside consultant claims that the company could make more money from its customers if it sold laptops and printers togethe as a bundle instead of separately. Is the consultant right? Assume again that the firm has one customer of each type and that marginal cost is zero. How much does the firm earn in total from pure bundling? The profit-maximizing pure bundle price is $ (Enter your response as a whole number.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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