Question

Assume that you manage a firm that sells calculators. You want to sell calculators to both...

Assume that you manage a firm that sells calculators. You want to sell calculators to both commercial users and home users, and so you have developed 2 types of calculators - fancy and basic calculators. Each customer type has the following valuations for each type of calculator:

Home

User

Commercial

User
Fancy Calculator $100 $200
Basic Calculator $30 $50

If you have an 100 home users and 100 commercial users that at most will buy 1 calculator each, you will maximize total revenue by setting what price for the fancy calculator? (Write answer without the dollar sign.)

The answer is 180. Please show work on how to get the answer. Thank you.

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Answer #1

Both 100 and 200 are correct.

[Since, you have said that 100 was marked incorrect, now mark 200 as your answer.]

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