Suppose you are a manager of a firm that produces products X, Y and Z. You know that there are two different types of consumers, type 1 and type 2, who value your products differently. You also know that there 10,000-type1 consumers and 50,000 type 2 consumers with the following valuations for the three products:
Consumer Type Product X Product Y Product Z
1 $250 $150 $100
2 $200 $75 $250
(a) If you price each product separately (i.e., using a standard pricing strategy), what prices should you charge to maximize revenues and what are the revenues?