You work for an IT company which recently developed a software package for a hospital, and multiple copies of the software will be installed on different computers of this hospital. The fixed cost of developing this software is $9,000. The marketing team finds that within this hospital, demand for the software is Qª = 300 - 0.2Pand that it would cost your company $800 per unit to install and maintain the software at each computer the software is installed on. The CEO has asked you to construct a two-part pricing strategy for this software. (A) Under a two-part pricing strategy, what is the per-unit fee? [ Select ] ["$600", "$9000", "$1000", "$800", "$10000"] (B) Under a two-part pricing strategy, what is the fixed fee you charge the hospital? (Hint: As a "license fee" to use the software) [ Select ] ["$35000", "$45000", "$28000", "$42000", "$49000"]

You work for an IT company which recently developed a software package for a hospital, and multiple copies of the software will be installed on different computers of this hospital. The fixed cost of developing this software is $9,000. The marketing team finds that within this hospital, demand for the software is Qª = 300 - 0.2Pand that it would cost your company $800 per unit to install and maintain the software at each computer the software is installed on. The CEO has asked you to construct a two-part pricing strategy for this software. (A) Under a two-part pricing strategy, what is the per-unit fee? [ Select ] ["$600", "$9000", "$1000", "$800", "$10000"] (B) Under a two-part pricing strategy, what is the fixed fee you charge the hospital? (Hint: As a "license fee" to use the software) [ Select ] ["$35000", "$45000", "$28000", "$42000", "$49000"]

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

Chapter17: Making Decisions With Uncertainty

Section: Chapter Questions

Problem 6MC

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A company produces and sells a consumer product and is able to control the demand for the product by varying the selling price. The approximate relationship between price and demand is p= 200-0.05D where p is the price per unit in dollars and D is the demand per month. The company is seeking to maximize its profit. The fixed cost is $15000 per month and the variable cost is $50 per unit. a. What is the number of units that should be produced and sold each month to maximize profit? b. What is the domain of profitable demand during a month? Show your spreadsheet.
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