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The table below 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 how should Microsoft price their products?

Consumer Type PowerPoint Excel Word
Accountants $65 $90 $140
Marketing/Sales $115 $70 $125
Admin Assistants $40 $165 $55

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91085004

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