Use the following to answer questions: Table: Maximum Willingness to Pay for Word and Excel $$\begin{array} { l c c }
\hline & \text { Amanda } & \text { Yvonne } \
\hline \text { Word } & \$ 110 & \$ 60 \
\text { Excel } & \$ 40 & \$ 100 \
\text { Office (Word + Excel) } & \$ 150 & \$ 160 \
\hline
\end{array}$$
-(Table: Maximum Willingness to Pay for Word and Excel) Refer to the table. If Microsoft sells each product, Word and Excel, individually, what is the maximum profit Microsoft can make from selling the two products? (Assume the marginal costs of production are zero.)

Question

Use the following to answer questions: Table: Maximum Willingness to Pay for Word and Excel $$\begin{array} { l c c } 
\hline & \text { Amanda } & \text { Yvonne } \
\hline \text { Word } & \$ 110 & \$ 60 \
\text { Excel } & \$ 40 & \$ 100 \
\text { Office (Word + Excel) } & \$ 150 & \$ 160 \
\hline
\end{array}$$
-(Table: Maximum Willingness to Pay for Word and Excel) Refer to the table. If Microsoft sells each product, Word and Excel, individually, what is the maximum profit Microsoft can make from selling the two products? (Assume the marginal costs of production are zero.)

Quizplus · Accepted Answer

The maximum profit Microsoft can make is $210. This is because Amanda is willing to pay $110 for Word and $40 for Excel, while Yvonne is willing to pay $60 for Word and $100 for Excel. If Microsoft sells each product individually, it can make a profit of $110 + $40 + $60 + $100 = $210.

Use the Following to Answer Questions: Table: Maximum Willingness to Pay