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Economics

A German machine company sells industrial machinery and maintenance policies for the machine. There are four market segments. Figure 5-9 shows the size of each market segment and the amount each segment will pay for the machine separately, maintenance separately, or the bundle of machinery + maintenance. The variable cost is $550 per machine and $470 per maintenance agreement. What set of prices maximize profits?

5.9

Machine Maintenance Bunddle

Costs $550 $470 $1020

Size Machine Use Max Mainenance Max Bundle Max

12 1250 1500 2600

23 1450 540 1750

22 1080 1200 2090

43 1390 1100 2350

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91705207

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