Please use the following pricing schedule to solve this problem. The following table contains willingness to pay data ($) for printers and printer ink across two segments of consumers "A" and "B." Note: the numbers for Ink represent willingness to pay for the first, second, third, fourth, and fifth unit of ink, respectively (e.g., Segment A is willing to Pay $15 for the first ink, $12 for the second, etc.).
| Printer WTP |
INK |
1 |
2 |
3 |
4 |
5 |
| SEG A) 250 |
|
15 |
12 |
10 |
5 |
0 |
| SEG B) 110 |
|
16 |
12 |
11 |
0 |
0 |
1. Ignore the price of ink for a moment. If only the printer were being sold in the market, what price should they be sold for to maximize profits? Who will buy the product at that price?
2. Based on what we discussed in class, under what market conditions would a company choose to bundle the printer and the ink?
(i.e., what is the major point of metered pricing?)
3. Write down the steps for analyzing a product line pricing problem.