Should CSC offer one version? Which one at what price?

Or both
Exhibit 1
Segment
Size Pdt. dev. cost
Mkt Dev Cost var cost
Large corp WTP
5000 Price
$150,000 Consumer Surplus
Margin
University/Corp R&D WTP
2000 Price
$100,000 Consumer Surplus
Margin
Consultants/ Professional WTP
20000 Price
$200,000 Consumer Surplus
Margin
Small Business WTP
15000 Price
$200,000 Consumer Surplus
Margin
Student WTP
500000 Price
$300,000 Consumer Surplus
Margin
at what price? Or both at what prices?
Willingness-to-pay
Stu. Ver. Comm. Ver.
$100,000 $200,000
$15 $25
$350 $1,200

$250 $900

$100 $500

$75 $225

$50 $60
 Exhibit 1 Willingness-to-pay
Segment
Size Pdt. dev. cost
Mkt Dev Cost var cost
Large corp WTP
5000 Price
$150,000 Consumer Surplus
Margin
University/Corp R&D WTP
2000 Price
$100,000 Consumer Surplus
Margin
Consultants/ Professional WTP
20000 Price
$200,000 Consumer Surplus
Margin
Small Business WTP
15000 Price
$200,000 Consumer Surplus
Margin
Student WTP
500000 Price
$300,000 Consumer Surplus
Margin
Willingness-to-pay
Stu. Ver.
$100,000 Fixed cost $100,000
$15 Variable cost $15
$350
If we price it at $350 Fixed Cost
Cost $250,000
Revenue $1,750,000
$250 Profit $1,425,000

If we price it at $250
Cost $350,000
$100 Revenue $1,750,000
Profit $1,295,000

If we price it at $100
$75 Cost $550,000
Revenue $2,700,000
Profit $1,745,000

$50 If we price it at $75

Cost $750,000
Revenue $3,150,000
Profit $1,770,000

If we price it at $50
Cost $1,050,000
Revenue $27,100,000
Profit $17,920,000
Demand Variable Cost Total
5000 $75,000 $325,000

7000 $105,000 $455,000

27000 $405,000 $955,000

42000 $630,000 $1,380,000

542000 $8,130,000 $9,180,000

 Exhibit 1 Willingness-to-pay
Segment
Size Pdt. dev. cost
Mkt Dev Cost var cost
Large corp WTP
5000 Price
$150,000 Consumer Surplus
Margin
University/Corp R&D WTP
2000 Price
$100,000 Consumer Surplus
Margin
Consultants/ Professional WTP
20000 Price
$200,000 Consumer Surplus
Margin
Small Business WTP
15000 Price
$200,000 Consumer Surplus
Margin
Student WTP
500000 Price
$300,000 Consumer Surplus
Margin
Willingness-to-pay
Comm. Ver.
$200,000 Fixed cost $200,000
$25 Variable cost $25
$1,200
If we price it at $1200 Fixed Cost
Cost $350,000
Revenue $6,000,000
$900 Profit $5,525,000

If we price it at $900
Cost $450,000
$500 Revenue $6,300,000
Profit $5,675,000

If we price it at $500
$225 Cost $650,000
Revenue $13,500,000
Profit $12,175,000

$60 If we price it at $225

Cost $850,000
Revenue $9,450,000
Profit $7,550,000

If we price it at $60
Cost $1,150,000
Revenue $32,520,000
Profit $17,820,000
Demand Variable Cost Total
5000 $125,000 $475,000

7000 $175,000 $625,000

27000 $675,000 $1,325,000

42000 $1,050,000 $1,900,000

542000 $13,550,000 $14,700,000

 Exhibit 1 Willingness-to-pay
Segment Stu. Ver.
Size Pdt. dev. cost $100,000
Mkt Dev Cost var cost $15
Large corp WTP $350
5000 Price
$150,000 Consumer Surplus
Margin
University/Corp R&D WTP $250
2000 Price
$100,000 Consumer Surplus
Margin
Consultants/ Professional WTP $100
20000 Price
$200,000 Consumer Surplus
Margin
Small Business WTP $75
15000 Price
$200,000 Consumer Surplus
Margin
Student WTP $50
500000 Price
$300,000 Consumer Surplus
Margin
 Demand
Willingness-to-pay 5000 Large corp C
Comm. Ver. 2000 University/Corp R&D C
$200,000 20000 Consultants/ Professional C
$25 15000 Small Business C
$1,200 500000 Student S

Total Pdt dev cost $300,000

Total Mkt dev cost $950,000
$900 Total demand of S 500000
Total demand of C 42000
Sum 542000
Total variable cost $8,550,000.00
$500 Price of S 50
Price of C 225
Total revenue 34450000
Profit $24,650,000.00
$225
$29,600,000.00 $18,095,000.00
total cost $9,800,000.00

$60
C C C C C
C C C C C
C C S S S
S S C C S
C S C S S

$300,000 $300,000 $300,000 $300,000 $300,000

$950,000 $950,000 $950,000 $950,000 $950,000
15000 515000 20000 520000 535000
527000 27000 522000 22000 7000
542000 542000 542000 542000 542000
$13,400,000.00 $8,400,000.00 $13,350,000.00 $8,350,000.00 $8,200,000.00
75 50 100 50 50
60 500 60 225 900
32745000 39250000 33320000 30950000 33050000
$18,095,000.00 $29,600,000.00 $18,720,000.00 $21,350,000.00 $23,600,000.00

$14,650,000.00 $9,650,000.00 $14,600,000.00 $9,600,000.00 $9,450,000.00

C C C C C
C S S S S
S C C C C
S C C S S
C C S C S

$300,000 $300,000 $300,000 $300,000 $300,000

$950,000 $950,000 $950,000 $950,000 $950,000
35000 2000 502000 17000 517000
507000 540000 40000 525000 25000
542000 542000 542000 542000 542000
$13,200,000.00 $13,530,000.00 $8,530,000.00 $13,380,000.00 $8,380,000.00
75 250 50 75 50
60 60 225 60 500
33045000 32900000 34100000 32775000 38350000
$18,595,000.00 $18,120,000.00 $24,320,000.00 $18,145,000.00 $28,720,000.00

$14,450,000.00 $14,780,000.00 $9,780,000.00 $14,630,000.00 $9,630,000.00

C C C C S
S S S S C
S S S S C
C C S S C
S C C S S

$300,000 $300,000 $300,000 $300,000 $300,000

$950,000 $950,000 $950,000 $950,000 $950,000
522000 22000 37000 537000 505000
20000 520000 505000 5000 37000
542000 542000 542000 542000 542000
$8,330,000.00 $13,330,000.00 $13,180,000.00 $8,180,000.00 $8,500,000.00
50 100 75 50 50
225 60 60 1200 225
30600000 33400000 33075000 32850000 33575000
$21,020,000.00 $18,820,000.00 $18,645,000.00 $23,420,000.00 $23,825,000.00

$9,580,000.00 $14,580,000.00 $14,430,000.00 $9,430,000.00 $9,750,000.00

S S S S S
C C C C C
C C C S S
C S S C C
C S C S C

$300,000 $300,000 $300,000 $300,000 $300,000

$950,000 $950,000 $950,000 $950,000 $950,000
5000 520000 20000 525000 25000
537000 22000 522000 17000 517000
542000 542000 542000 542000 542000
$13,500,000.00 $8,350,000.00 $13,350,000.00 $8,300,000.00 $13,300,000.00
350 50 75 50 100
60 500 60 225 60
33970000 37000000 32820000 30075000 33520000
$19,220,000.00 $27,400,000.00 $18,220,000.00 $20,525,000.00 $18,970,000.00

$14,750,000.00 $9,600,000.00 $14,600,000.00 $9,550,000.00 $14,550,000.00

S S S S S
C C S S S
S S C C C
S S C C S
S C S C S

$300,000 $300,000 $300,000 $300,000 $300,000

$950,000 $950,000 $950,000 $950,000 $950,000
540000 40000 507000 7000 522000
2000 502000 35000 535000 20000
542000 542000 542000 542000 542000
$8,150,000.00 $13,150,000.00 $8,480,000.00 $13,480,000.00 $8,330,000.00
50 75 50 250 50
900 60 225 60 500
28800000 33120000 33225000 33850000 36100000
$19,400,000.00 $18,720,000.00 $23,495,000.00 $19,120,000.00 $26,520,000.00

$9,400,000.00 $14,400,000.00 $9,730,000.00 $14,730,000.00 $9,580,000.00

S S S S
S S S S
C S S S
S C C S
C C S C

$300,000 $300,000 $300,000 $300,000

$950,000 $950,000 $950,000 $950,000
22000 27000 527000 42000
520000 515000 15000 500000
542000 542000 542000 542000
$13,330,000.00 $13,280,000.00 $8,280,000.00 $13,130,000.00
75 100 50 75
60 60 225 60
32850000 33600000 29725000 33150000
$18,270,000.00 $19,070,000.00 $20,195,000.00 $18,770,000.00

$14,580,000.00 $14,530,000.00 $9,530,000.00 $14,380,000.00

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