A computer hardware firm sells both laptop computers and printers. Through the magic oft focus groups, their pricing team determines that they have an equal number of three types of customers, and that these customers' reservation prices areas illustrated in the figure below.LaptopPrinterBundleCustomer ACustomer BCustomer C$750$1,000$100$150$850$1,150$650Se00S50Assume for simplicity the marginal cost of production for laptops and printers is zero.in total?If the firm were to charge only individual prices (not use the bundle price), what prices should it set for its laptops and printers to maximize profil? Assuming for simplicity that the firm has only one customers of each type, how much does it earmTo maximize profit using individual prices, the firm should charge a price for laptops ofp=0and a price for printers of(Enter your responses as whole numbers.)In tum, profit isx=$. (Enter your response as a whole number.)After conducting a costly study, an outside consultant claims that the company could make more money from its customers if it sold laptops and priters together as a bundle instead of separately. Is the consultant right? Assume again that thefirm has one customer of each type and that marginal cost is zero. How much does the firm ean in total from pure bundling?The profit-maximizing pure bundle price is S. (Enter your response as a whole number.)In tum, profit is x = $. (Enter your response as a whole number.)Why does bundling pay or not pay?V hecause customer reservation values for lantons and orinters in this example arevl correlated.Bundlina

the marginal cost of production for laplops and printers is zero. arge only individual prices (not use the bundie price), what prices should it set for its laptops and printors to maximize profit? Assuming for simplicily that the firm as only one custormer ảng individual prices, the firm should charge a price for laptops of sof s as whole numbers.) (Enter your response as a whole number.) stly study, an outside consultant claims that the company could make more money from its customers if it sold laptops and printers together as a bundle instead of separately. Is the oc er of each type and that marginal cost is zero. How much does the firm eam in total from pure bundling? pure bundle price is S]. (Enter your response as a whole number.)

the marginal cost of production for laplops and printers is zero. arge only individual prices (not use the bundie price), what prices should it set for its laptops and printors to maximize profit? Assuming for simplicily that the firm as only one custormer ảng individual prices, the firm should charge a price for laptops of sof s as whole numbers.) (Enter your response as a whole number.) stly study, an outside consultant claims that the company could make more money from its customers if it sold laptops and printers together as a bundle instead of separately. Is the oc er of each type and that marginal cost is zero. How much does the firm eam in total from pure bundling? pure bundle price is S]. (Enter your response as a whole number.)

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 5.1IP

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