Target market-what is optimal price and associated profit

Assignment Help Business Economics

Reference no: EM131073969

Photoshop Version Household User Professional User

Full Version $125 $950

Discount Version $100 $300

Also, assume that the “target market” has 1 Household and 1 Graphic Designer (a simple way of representing equal proportions of each type of customer). The marginal cost of production is $0.

Part 1: If Adobe sells only to Graphic Designers, what is the optimal price and associated profit?

Part 2: Can Adobe use price discrimination to improve upon the profit in Parts 1 and 2? If so, how? (be specific) (hint: price discrimination doesn’t always work in these settings, so don’t assume that it is always optimal. If it is not optimal, see if you can figure out what numbers would need to change to make price discrimination an optimal strategy).

Reference no: EM131073969

Questions Cloud

Question regarding the expected return on stock : The current one-year Treasury bill rate is 3.3 and the current thirty-year bond rate is 8%. The firm has 132 million shares outstanding, selling for $73.36 per share. The short term equity risk premium is 5.1 and the long term equity risk premium ..

What is the range for the relative price : Go back to the numerical example with no factor substitution that leads to the production possibility frontier in figure 5-1. What is the range for the relative price of cloth such that the economy produces both cloth and food? Which good is produced..

Borrow now to carry out entire project including maintenance : A structure with a 40 year life span has an initial cost of $800,000. maintenance costs will be $30,000 every 5 years. how much money should the city borrow now to carry out the entire project including maintenance . the interest rate is 5%.

Question regarding the market required yield to maturity : 1. The Saleemi Corporation's $1,000 bonds pay 9 percent interest annually and have 13 year until maturity. You can purchase the bond $895. What is the yield to maturity on this bond?Should you purchase the bond if the yield to maturity on a compa..

Target market-what is optimal price and associated profit : Also, assume that the “target market” has 1 Household and 1 Graphic Designer (a simple way of representing equal proportions of each type of customer). The marginal cost of production is $0. If Adobe sells only to Graphic Designers, what is the optim..

How serious is violence as a modern health concern : What are the differences between conventional, complementary and alternative health care? Give some examples of each type. How serious is violence as a modern health concern

Kinds of transistor circuits amplifying and switching : 1. The bridge rectifier is similar to a full-wave rectifier .because it produces a full-wave output voltage.

How health care marketing similar to marketing other product : A large academic medical center was interviewing candidates for the position of marketing director. How is health care marketing similar to marketing other products or services

An indifference curve involving two goods identifies : An indifference curve involving two goods identifies the:

User Account

All Pages