Essay
There are two types of consumers of High Definition Television (HDTV) sets. The first type of consumer is highly eager to purchase the sets. Their demand is The resulting marginal revenue function is
After the first month the HDTV sets are on the market, the first-type demand goes to zero at any price. The second type of consumer is more sensitive to price and will be the same one month after the sets are on the market. Their demand is
The resulting marginal revenue function is
Suppose that the marginal cost of producing HDTV sets are constant at $200. What pricing strategies might the manufacturer of HDTV sets consider to maximize profits?
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