Question: Question 3 - Bundle Pricing (8 points) The Wall Street Journal (WSJ) wants to price home subscriptions and web access to the following segments

Question 3 - Bundle Pricing (8 points) The Wall Street Journal (WSJ) wants to price home subscriptions and web access to the following segments of customers. Assume there are three market segments of the same size and their willingness to pay (per month) for each product are provided as follows: Segment New Graduates Size WTP for Home Subscription WTP for Web Access 100 5 20 Working Professional 100 30 15 Seasoned Managers 100 35 5 a. If WSJ offers home subscriptions and web access separately in the market, what are the optimal prices for home subscription and web access, respectively? What is the maximum profit? (3 points) b. If WSJ bundles home subscriptions and web access together, and offer only the bundle into the market, what price should WSJ charge in order to maximize its profit? What is the maximum profit? (3 points) c. If WSJ were to offer three options: home subscriptions, web access, and the two of them bundled together, what are the optimal prices for each option? What is the maximum profit? State your answers very clearly. (2 points)

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