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Problem - Google is interested in understanding consumers' preferences for Nexus 10 over iPad, and has conducted a conjoint analysis. It considered three features of a tablet: (1) brand (Google vs. Apple), (2) storage size (32GB vs. 64GB), and (3) price ($400 vs. $500).
Here is a preference ranking of one of the respondents, Mr. Poon. (8: best, 1: worst)
Price: $400
Price: $500
Storage: 32 GB
Storage: 64 GB
Brand: Google
4
6
1
2
Brand: Apple
5
8
3
7
Using the averaging method we discussed in class, answer the following questions.
(a) From the preference ranking above, it is clear that Mr. Poon prefers Apple to Google. How much more would Mr. Poon be willing to pay for Apple brand over Google brand?
(b) Suppose that Apple iPad with 64GB storage is priced at $600, and Mr. Poon is willing to buy this iPad. How much would Mr. Poon be willing to pay for Google Nexus 10 with 32GB?
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