Please answer 6.10 Given that the stadium is frequently full, the idea of expanding the stadium has arisen."A preliminary study suggests that the cost of capacity expansion would be $100 per seatper year.(b) Would you recommend that Stanford goexpansion?ahead with the project of capacity6.10. SPOKENWORD. Your software company has just completed the first version of Spo-ken Word, a voice-activated word processor. As marketing manager, you have to decideon the pricing of the new software. You commissioned a study to determine the poten-tial demand for Spoken Word. From this study, you know that there are essentially twomarket segments of equal size, professionals and students (one million each). Profes-sionals would be willing to pay up to $400 and students up to $100 for the full versionof the software. A substantially scaled-down version of the software would be worth$50 to consumers and worthless to professionals. It is equally costly to sell any version.In fact, other than the initial development costs, production costs are zero. Althoughyou know there are two market segments, you cannot directly identify a consumer asbelonging to a specific market segment.(a) What are the optimal prices for each version of the software?Suppose that, instead of the scaled-down version, the firm sells an intermediate versionthat is valued at $200 by professionals and $75 by students.(b) What are the optimal prices for each version of the software? Is the firm betteroff by selling the intermediate version instead of the scaled-down version?6.11. SoS. SOS (Sounds of Silence, Inc.) prepares to launch a revolutionary systemr. Ignore the facStanford Stadiumhold 90,000 seat

Optimal demand refers to the level of demand for a product or service that maximizes a consumer's…

6.10. SPOKENWORD. Your software com ken Word, a voice-activated word proces on the pricing of the new software. You tial demand for Spoken Word. From this market segments of equal size, professi sionals would be willing to pay up to $ of the software. A substantially scaled- $50 to consumers and worthless to profe In fact, other than the initial developm you know there are two market segmen belonging to a specific market segment. (a) What are the optimal prices for ea Suppose that, instead of the scaled-dow that is valued at $200 by professionals a (b) What are the optimal prices for ea off by selling the intermediate ven

6.10. SPOKENWORD. Your software com ken Word, a voice-activated word proces on the pricing of the new software. You tial demand for Spoken Word. From this market segments of equal size, professi sionals would be willing to pay up to $ of the software. A substantially scaled- $50 to consumers and worthless to profe In fact, other than the initial developm you know there are two market segmen belonging to a specific market segment. (a) What are the optimal prices for ea Suppose that, instead of the scaled-dow that is valued at $200 by professionals a (b) What are the optimal prices for ea off by selling the intermediate ven

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 4MC

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