A Company Producing Apps for a Social Networking Site Is

Essay

A company producing apps for a social networking site is deciding which path to pursue. The first is to create an app that has universal appeal but faces a crowded market. This app, A, would have sales of 200,000 copies at $1.99 each under ideal conditions, but under rough conditions would have sales of only 90,000 copies at $0.99 each. The other app, B, would have sales of 300,000 units at $1.49 each under ideal conditions, but sales would be reduced to 40,000 units at $0.49 each under rough conditions. If ideal and rough conditions occur with the same frequency, which app should the company produce? Note: both apps cost the same amount to develop.