Asked by TANNISHTHA MANDAL on Sep 24, 2024
Verified
In this case the firm should
A) Produce both the versions and price discriminate since doing so gives a higher revenue
B) Produce only the no-brand version
C) Produce only the hi-end professional series
D) Exit the marketplace
Price Discriminate
A practice where a seller charges different prices to different customers for the same product or service, often based on the willingness to pay.
Revenue
The total income generated from the sale of goods or services related to a company's primary operations.
- Understand the concept of price discrimination and its applications.
- Evaluate the effects of distinct pricing and product approaches on revenue performance.
Verified Answer
KN
kenyon nisbettabout 12 hours ago
Final Answer :
A
Explanation :
Producing both versions and price discriminating by charging a higher price for the professional version will result in higher revenue for the firm. It allows them to capture both the budget-conscious and high-end markets, maximizing their potential customer base and profits. Therefore, option A is the best choice.
Learning Objectives
- Understand the concept of price discrimination and its applications.
- Evaluate the effects of distinct pricing and product approaches on revenue performance.