The reservation prices (in dollars) of three classes of demanders (classes A, B,
and C) for Ricky Parton’s (a Latin country-western singer) compact discs are
given in the table that follows:
It costs $4 to produce and distribute each compact disc. The company can sell
each CD separately, can put them together as a boxed set (that is, as a pure
bundle), or can sell them in a mixed bundling format (offer the CDs both
separately and as a boxed set). Assume that each demander wants only one of
each of the CDs at the reservation price (or at any lower price) and that there
are an equal number of demanders in each class. For simplicity, assume that
the only costs are those mentioned here.
a. What pricing method would you advise Ricky’s company to use?
b. How much better (profitwise) is the best pricing method than the second
most profitable pricing method?
Â
"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"
