Problem 4 (25 points) Consider a retailer selling two substitutable products, product A and product B, in a make-to-order setting. Customers can come from five possible segments which differ in their willingness-to-pay for the two products; the following table shows the size of each customer segment and the values of their willingness-to-pay for each product. Segment Segment size Willingness-to-pay for A Willingness-to-pay for B 1 100 100 500 2 200 80 350 3 500 60 250 4 250 50 100 5 50 40 75 (a) (5 points) If the retailer decides to sell only product B at $100, calculate the revenue the company will get (note that in revenue calculation you do not need to know about the costs). (b) (10 points) (disregard (a)) If the retailer decides to sell only product B, what should be its selling price in order to maximize revenues? Assume the same price should be charged to each customer. (c) (10 points) (disregard (a) and (b)) Calculate the total revenue earned if the retailer decides to set the price of product A equal to 55 and the price of product B equal to 250. Problem 4 (25 points) Consider a retailer selling two substitutable products, product A and product B, in a make-to-order setting. Customers can come from five possible segments which differ in their willingness-to-pay for the two products; the following table shows the size of each customer segment and the values of their willingness-to-pay for each product. Segment Segment size Willingness-to-pay for A Willingness-to-pay for B 1 100 100 500 2 200 80 350 3 500 60 250 4 250 50 100 5 50 40 75 (a) (5 points) If the retailer decides to sell only product B at $100, calculate the revenue the company will get (note that in revenue calculation you do not need to know about the costs). (b) (10 points) (disregard (a)) If the retailer decides to sell only product B, what should be its selling price in order to maximize revenues? Assume the same price should be charged to each customer. (c) (10 points) (disregard (a) and (b)) Calculate the total revenue earned if the retailer decides to set the price of product A equal to 55 and the price of product B equal to 250