Suppose that there are two different customer segments for an application geared toward service organizations, and the vendor has two versions of the software. Each customer will buy the version that gives it the highest surplus. For simplicity, use whole dollars for all prices.

1. If there are 1000 each of universities and companies as potential customers, what are the optimal prices and revenue if the seller must post a single price for each version?

Price for Gold Version:

Price for Basic Version:

Total revenue:

2. If there are 1000 companies as potential customers but only 100 universities, what are the optimal prices and revenue if the seller must post a single price for each version?

Price for Gold Version:

Price for Basic Version:

Total revenue:

3. Now suppose the seller can charge different prices depending on whether the customer organization is a university or a company, and there are 1000 of each. What are the optimal prices and revenue?

Price for Educational Gold Version: Price for Corporate Gold Version:

Price for Educational Basic Version: Price for Corporate Basic Version:

Total revenue:

Willingness to Pay Universities Companies Gold Version $3000 $4000 Basic Version $1500 $2000