Reference no: EM132456904

You own a video store and you think there are two consumer groups that have different values for 2 DVDs as follows:

Group one values DVD A at ten dollars and DVD B at eight dollars

Group two values DVD A at four dollars and DVD B at twelve dollars.

There are estimated to be fifty consumers in each group. The store currently has one hundred of each DVD on hand. It already paid ten dollars for each DVD.

If it is unable to sell them all it can return them (sell them back) to the distributor for four dollars each. To maximize contribution margin from the sale (or return) of these DVDs the store should:

a. set a standard price of $8 for each DVD

b. set a price of $10 for A and $12 for B

c. offer A and B together for a price of $16

d. offer A and B together for a price of $18

e. none of the above