In Module 3.1 we considered a number of pricing tactics of the “pick-a-plan” variety. Your task on this assignment is to identify a firm that offers alternative pricing plans to customers. Identify a firm that provides pricing plans to customers. Describe at least two alternative pricing plans offered by the firm. Which pricing plan is likely to have the higher marginal cost? Explain. (Remember that uncertainty is a kind of cost – for example, uncertainty over residual value in a leasing arrangement.) What kinds of customers (what attributes or concerns) are likely to be attracted to each plan? Which set of customers is likely to have the more elastic demand? Why? Does it seem likely that the price markup is lower for the plan aimed at customers with the more elastic demand? Explain.
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