Microsoft is the market leader in office software with its MSOffice. Its marginal cost of production...

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Microsoft is the market leader in office software with its MSOffice. Its marginal cost of production c is 1 dollar per unit. Home users demand 40 million licenses and are willing to pay 50 dollars, whereas businesses demand 60 million licenses and are willing to pay 100 dollars. Microsoft also produces a home version of MSOffice at a marginal cost of c'-2. Home users and businesses are willing to pay 60 and 40 dollars, respectively, for the home version. Which is the best pricing strategy for Microsoft? Microsoft is the market leader in office software with its MSOffice. Its marginal cost of production c is 1 dollar per unit. Home users demand 40 million licenses and are willing to pay 50 dollars, whereas businesses demand 60 million licenses and are willing to pay 100 dollars. Microsoft also produces a home version of MSOffice at a marginal cost of c'-2. Home users and businesses are willing to pay 60 and 40 dollars, respectively, for the home version. Which is the best pricing strategy for Microsoft?