The following table contains different consumers' values for three software titles: PowerPoint,Excel,and Word.Suppose there are 100 consumers of each type.It costs Microsoft $5 to produce each piece of software.If Microsoft wants to devise a pricing strategy that is incentive compatible between consumer types and will maximize its profit,then it should:

\begin{array}{|l|l|l|l|}\hline \text { Consumer Types } & \text { PowerPoint } & \text { Excel } & \text { Word } \\\hline \text { Accountants } & \$ 75 & \$ 100 & \$ 150 \\\hline \text { Marketing/Sales } & \$ 125 & \$ 80 & \$ 135 \\\hline \text { Administrative Assistants } & \$ 50 & \$ 175 & \$ 75 \\\hline\end{array}

A) charge $50 for PowerPoint, $80 for Excel, and $75 for Word.
B) charge a single price of $300 for the bundle of PowerPoint, Excel, and Word.
C) charge $125 for PowerPoint, $175 for Excel, and $150 for Word.
D) charge $325 for the bundle of PowerPoint, Excel, and Word and permit consumers to purchase each software title individually at $81.10 each.

Suppose That the Inverse Demand for a Downstream Firm Is

Multiple Choice

Correct Answer:VerifiedUnlock this answer nowGet Access to more Verified Answers free of chargeAccess For Free

Correct Answer:
Verified
Unlock this answer now
Get Access to more Verified Answers free of charge