Problem Set 4 A1 10550
B1 27
B2 44
C 15
Demand curve for the customers willing to pay higher price is d1 = A1 – B1*p1.
Demand curve for the more price-sensitive customers is d2 = A1 – B2*p2.
Assume the production cost for each product (standard and customized) is c = $C per unit. (Values of A1, B1, B2, and C are provided in the below data set.)
What price should your organization charge each segment if its goal is to maximize profits?

If your organization were to charge a single price over both segments, what should it be? How much increase in profits does differential pricing provide?
If the production is limited to 4500 units, what should you charge to each segment?