Suppose Cyberdyne Systems creates a Professional version of its machine learning software. By disabling some of the features in the Professional…

Suppose Cyberdyne Systems creates a Professional version of its machine learning software. By disabling some of the features in the Professional version it can create a Home version. Both versions have zero marginal cost. Cyberdyne Systems faces two customer segments each interested in buying at most one version. The reservation prices (RPs) of each segments for each version are displayed below.

Professional Version Home Version Segment Size

Business $100 $0 20

Home Buyers $20 $5 80

Each customer will choose the software that gives her the highest surplus.

1. If Cyberdyne Systems offers only the Professional version, what price should it charge in order to maximize revenue?

2. If it offers both versions, what prices should it set to maximize revenue.

3. Now suppose that instead of valuing the Home version at $0, each Business buyer values the Home version at $80. Keep all other RPs the same as before. Show that at the prices you chose in (2), Business buyers would actually prefer to buy the Home version instead of the Professional version. Is this better or worse for Cyberdyne Systems than the single-product strategy identified in (1)?

4. Assume Business buyers value the products as in part (3). Keep the Home version at the same price as in part (2), but lowering the price of Professional version until the Business buyers will be willing to buy the Professional version instead of the Home version. What pair of prices will Cyberdyne Systems now be charging? What profits will it make? Is this better or worse for the company than the single-product strategy described in (1)?

Show more







Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10