Managerial Economics & Organizational Architecture 6th Edition by James Brickley , Clifford Smith ,Jerold Zimmerman

Exercise 16

Xerox sells both copiers and a toner for their copiers. While customers are not required to buy Xerox toner, most do because specified machines use toner only for that machine. The Xerox toner and machines are closely designed and non-Xerox toner in Xerox machines produces inferior copies. Evaluate the statement: "Xerox makes 75 percent of its profits selling toner and 25 percent of its profits selling machines."