(10 points) 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: Consumer Types Accountants Marketing Sales Administrative Assistants PowerPoint $75 $125 $50 Excel $100 $80 $175 Word $150 $135 $75 (a) What is the firm’s profit if it charges $50 for PowerPoint, $80 for Excel, and $75 for Word. You must identify who will buy each product. (b) What is the firm’s profit if it charges a single price of $300 for the bundle of PowerPoint, Excel, and Word. You must identify who will buy the bundles. (c) What is the firm’s profit if it charges $325 for the bundle of PowerPoint, Excel, and Word and permit consumers to purchase each software title individually at $81.10 each. You must identify who will buy the bundles and who will buy which product separately.

3. (10 points) The following table contains different consumers values for three software titles:
PowerPoint, Excel, and Wor

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