Assume a software company developed supply chain management software which is of high quality. The company can
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Assume a software company developed supply chain management software which is of high quality. The company can of course downgrade the software to worse quality at fixed cost c. Assume that there are 1,000 customers, 70% of which would buy the software of high quality at $900, and that of bad quality at $400. The rest would like to pay $700 for the software of high quality and $300 for low quality.1) If it is possible for the company to perfectly discriminate customers, what would be the best pricing strategy for the company? 2) If it is impossible for the company to perfectly discriminate customers, what would be the best pricing strategy for the company?
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