Discuss the below:
Q: Suppose you are a manager of a firm that produces products X, Y and Z. You know that there are two different types of consumers, type 1 and type 2, who value your products differently. You also know that there 10,000 type1 consumers and 50,000 type 2 consumers with the following valuations for the three products:
|
Consumer Type
|
Product X
|
Product Y
|
Product Z
|
|
1
|
$250
|
$150
|
$100
|
|
2
|
$200
|
$75
|
$250
|
(a) If you price each product separately (i.e., using a standard pricing strategy), what prices should you charge to maximize revenues and what are the revenues?
(b) If you adopt a first-degree price discrimination policy, what prices should you charge to maximize revenues and what are the revenues?
(c) If you use a commodity-bundle strategy such that the products are sold as one item (i.e., you market product X, product Y, and product Z together), what price should you charge to maximize revenues and what are the revenues?