Use the following table to answer the following questions
$$\begin{array} { | c | c | c | }
\hline \text { Customer } & \begin{array} { c }
\text { Product A } \
\text { Reservation Price }
\end{array} & \begin{array} { c }
\text { Product B } \
\text { Reservation Price }
\end{array} \
\hline 1 & 1,000 & 200 \
\hline 2 & 800 & 400 \
\hline \text { Marginal Cost } & 500 & 100 \
\hline
\end{array}$$
-If the firm does not bundle the products, what single price should the firm charge for product B to maximize profit?
A) 100
B) 200
C) 300
D) 400

Question

Use the following table to answer the following questions 
$$\begin{array} { | c | c | c | } 
\hline \text { Customer } & \begin{array} { c } 
\text { Product A } \
\text { Reservation Price }
\end{array} & \begin{array} { c } 
\text { Product B } \
\text { Reservation Price }
\end{array} \
\hline 1 & 1,000 & 200 \
\hline 2 & 800 & 400 \
\hline \text { Marginal Cost } & 500 & 100 \
\hline
\end{array}$$
-If the firm does not bundle the products, what single price should the firm charge for product B to maximize profit?
A) 100
B) 200
C) 300
D) 400

Quizplus · Accepted Answer

To maximize profit, the firm should charge the highest price that at least one customer is willing to pay, as long as it covers the marginal cost. Customer 2 is willing to pay $400 for Product B, which is above the marginal cost of $100, maximizing profit.

Use the Following Table to Answer the Following Questions -If the Firm Does Not Bundle the Products, What Single