Question: Question:4. (20 points total) Cutter's Computers is considering introducing a new kind of tablet computer.... 4. (20 points total) Cutter's Computers is considering introducing a

Question:4. (20 points total) Cutter's Computers is considering introducing a new kind of tablet computer....

4. (20 points total) Cutter's Computers is considering introducing a new kind of tablet computer. They have the option of making a full-power tablet, a reduced-power tablet, or both. The firm also knows that there are two types of consumers: business users and home users. The different types of users have different willingnesses to pay for the two types. Here is a table of the information that Cutter's Computers observes about the market. Consumer type |Number|WTP for full power | WTP for reduced power Business 50 $2,500 $1,000 Home 100 $900 $800 (a) (2 points) If Cutter's Computers releases both types of tablets at different prices, what type of price discrimination are they engaging in? (b) (8 points) Describe in words the two constraints that Cutter's Computers must satisfy for this price discrimination to be successful. (c) (10 points) Suppose it costs Cutter's Computers $400 to make either type of tablet. What is the optimal pricing strategy? How much profit do they make under this strategy

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