A manufacturer produces two types of computer software, Word processing (W) and Spreadsheet (S), which is offered to two different retail outlets (1 and 2). The following table shows the maximum price each retail outlet is willing to pay for each individual software product. What is the optimal pricing strategy that will maximize revenue for the manufacturer, given the maximum the retail outlets are willing to pay?
A) Bundle both products (W and
S) and sell them at $230.
B) Price product W at $170 and Product S at $135.
C) Price product W at $170 and Product S at $170.
D) Price product W at $95 and Product S at $105.
E) Bundle both products (W and
S) and sell them at $275.

Question

A manufacturer produces two types of computer software, Word processing (W) and Spreadsheet (S), which is offered to two different retail outlets (1 and 2). The following table shows the maximum price each retail outlet is willing to pay for each individual software product.  What is the optimal pricing strategy that will maximize revenue for the manufacturer, given the maximum the retail outlets are willing to pay?
A) Bundle both products (W and 
S) and sell them at $230. 
B) Price product W at $170 and Product S at $135. 
C) Price product W at $170 and Product S at $170. 
D) Price product W at $95 and Product S at $105. 
E) Bundle both products (W and 
S) and sell them at $275.

Quizplus · Accepted Answer

The Answer is A

A Manufacturer Produces Two Types of Computer Software, Word Processing