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A Video Store Believes There Are Two Equally Sized Consumer

Question 47

Multiple Choice

A video store believes there are two equally sized consumer groups with different values for two DVDs as follows:
segment 1 values DVD A at $10 and DVD B at $8
Segment 2 values DVD A at $4 and DVD B at $12.
There are estimated to be 50 consumers in each group.The store currently has 100 of each DVD on hand.It paid $10 for each DVD.If it is unable to sell them all it can return them to the distributor for $4 each.To maximize profit contribution from the sale (or return) of these DVDs the store should:


A) set a standard price of $8 for each DVD.
B) set a price of $10 for A and $12 for B.
C) offer A and B together for a price of $16.
D) offer A and B together for a price of $18.
E) none of the above

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