The following table contains different consumers' values for three software titles: PowerPoint,Excel,and Word.Suppose there are 100 consumers of each type.It costs Microsoft $5 to produce each piece of software.If Microsoft wants to devise a pricing strategy that is incentive compatible between consumer types and will maximize its profit,then it should:
A) charge $50 for PowerPoint, $80 for Excel, and $75 for Word.
B) charge a single price of $300 for the bundle of PowerPoint, Excel, and Word.
C) charge $125 for PowerPoint, $175 for Excel, and $150 for Word.
D) charge $325 for the bundle of PowerPoint, Excel, and Word and permit consumers to purchase each software title individually at $81.10 each.
Correct Answer:
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