Table 3: Multi-version Case: Consumer Self-Selection Constraint on Pricing of "Industrial" Version

Segment Size
Segment Development Cost
Individual Willingness
to Pay for:
Industrial Version
Student Version
Individual Consumer
Surplus with "Student" Version
at $50

Maximum Price of "Industrial" Version

A. "Student" Version, Priced at

(Completition Cost: 100; 000)
(Unit Variable Cost: 15)
$ 50
$ 50
$ 50
$ 50
B."Industrial" Version, Priced at
(Completion Cost: 500; 000)
(Unit Variable Cost: 35)
$ 2,400
$ 1,950
$ 450
$ 175
C. "Student" Version at; "Industrial" Version at
$ 50 $ 2,400
$ 50 $ 1,950
$ 50 $ 450
$ 50 $ 175

Table 4: Single-version Case: Segment Consumer Surplus and Total Consumer Surplus

Large:
Multidivisional
Corporation
Segment Size 5,000
Segment Development Cost $ 150,000

A. "Student" Version,
Priced at
$ 200
$ 175
$ 150 $ -
$ 100 $ 250,000
$ 50 $ 500,000
B."Commercial" Version,
Priced at
$ 1,200 $ -
 $ 1,000
$ 300
$ 225
$ 60
C. "Industrial" Version,
Priced at
$ 2,500
$ 2,000
$ 600
$ 300
$ 1,000
$ 1,000,000
$ 4,500,000
$ 4,875,000
$ 5,700,000
$ -
$ 2,500,000
$ 9,500,000
$ 11,000,000
$ 12,000,000

Table 5: Optimal Multi-version Choice: Segment Consumer Surplus and Total Consumer Surplus

Segment Size
Segment Development Cost

A. "Student" Version,
Priced at
$ 50
B."Commercial" Version,
Priced at
$ 1,950
C. "Industrial" Version,
Priced at
$ 50 $ 1,950

Table 6: Single Version Case: CSC's Surplus, Consumer Surplus, and Social Surplus

A. "Student" Version, Priced at CSC'S Surplus

$ 200
$ 175
$ 150
$ 100
$ 50
B."Commercial" Version, Priced at
$ 1,200
$ 1,000
$ 300
$ 225
$ 60
C. "Industrial" Version, Priced at
$ 2,500
$ 2,000
$ 600
$ 300
$ 100
$ 3,400,000
$ 5,100,000
$ 4,750,000
$ 2,820,000
$ 7,920,000
$ 5,525,000
$ 6,375,000
$ 6,775,000
$ 7,550,000
$ 5,820,000
$ 11,675,000
$ 13,005,000
$ 14,305,000
$ 9,980,000
$ 13,780,000

Table 7: Optimal Multi-version Choice: CSC's Surplus, Consumer Surplus and Social Surplus
CSC'S Surplus
A. "Student" Version, Priced at
$50 $ 7,925,000
B."Commercial" Version, Priced at
$1950 $ 12,655,000
C. "Student" Version at,
"Industrial" Version at,
$50 ; $1,950 $ 20,580,000
aint on Pricing of "Industrial" Version; Segment Cash Flows and Aggregate Net Cash Flow

Large: Corporate R&D Consultants and

Unit
Multidivisional and University Professional
Contribution
Corporation Laboratories Companies

5,000 2,000 20,000

$ 150,000 $ 100,000 $ 200,000

$ 2,500 $ 2,000 $ 600

$ 150 $ 100 $ 200

$ 100 $ 50 $ 250

$ 2,400 $ 1,950 $ 450

<-(Segment Cash Flow)->

$ 35 $ -30,000 $ 500,000
$ 35 $ 500,000
$ 35
$ 35

$ 2,365 $ 11,675,000
$ 1,915 $ 9,425,000 $ 3,730,000
$ 415 $ 1,925,000 $ 730,000 $ 8,100,000
$ 140 $ 550,000 $ 180,000 $ 2,600,000

$ 11,675,000 $ -30,000 $ 500,000

$ 9,425,000 $ 3,730,000 $ 500,000
$ 1,925,000 $ 730,000 $ 8,100,000
$ 550,000 $ 180,000 $ 2,600,000

d Total Consumer Surplus

Corporate R&D Consultants and

Small
and University Professional Students
Businesses
Laboratories Companies
2,000 20,000 15,000 500,000
$ 100,000 $ 200,000 $ 200,000 $ 300,000
<-(Segment Cash Flow)->

$ -
$ 500,000 $ -
$ 1,000,000 $ 375,000
$ - $ 2,000,000 $ 1,125,000
$ 100,000 $ 3,000,000 $ 1,875,000 $ -
 $ -
$ 1,400,000 $ -
$ 1,550,000 $ 1,500,000 $ -
$ 1,880,000 $ 4,800,000 $ 2,475,000 $ -

$ -
$ 2,800,000 $ -
$ 3,400,000 $ 6,000,000 $ -
$ 3,800,000 $ 10,000,000 $ 3,000,000 $ -

urplus and Total Consumer Surplus

Large: Corporate R&D Consultants and

Small
Multidivisional and University Professional
Businesses
Corporation Laboratories Companies
5,000 2,000 20,000 15,000
$ 150,000 $ 100,000 $ 200,000 $ 200,000
<-(Segment Cash Flow)->

$ 3,000,000 $ 1,875,000

$ 2,750,000 $ 100,000

$ 2,750,000 $ 100,000 $ 3,000,000 $ 1,875,000

us, and Social Surplus

Consumer Surplus "Social" Surplus

$ - $ 3,400,000
$ 500,000 $ 5,600,000
$ 1,375,000 $ 6,125,000
$ 3,375,000 $ 6,195,000
$ 5,475,000 $ 13,395,000

$ - $ 5,525,000
$ 1,000,000 $ 7,375,000
$ 5,900,000 $ 12,675,000
$ 7,925,000 $ 15,475,000
$ 14,855,000 $ 20,675,000

$ - $ 11,675,000
$ 2,500,000 $ 15,505,000
$ 12,300,000 $ 26,605,000
$ 20,400,000 $ 30,380,000
$ 28,800,000 $ 42,580,000

mer Surplus and Social Surplus

Consumer Surplus "Social" Surplus
$ 4,875,000 $ 12,800,000

$ 2,850,000 $ 15,505,000

$ 7,725,000 $ 28,305,000
Net Cash Flow
Net
Small Cash Flow
Students
Businesses from
Modeler*
15,000 500,000
$ 200,000 $ 300,000

$ 300 $ 100
$ 175 $ 50

$ 125 $ -

$ 175 $ 100
nt Cash Flow)->

$ 325,000 $ 7,200,000 $ 7,895,000

$ 325,000 $ 7,200,000 $ 7,925,000
$ 325,000 $ 7,200,000 $ 7,425,000
$ 7,200,000 $ 7,100,000

$ 11,175,000
$ 12,665,000
$ 10,225,000
$ 1,900,000 $ 4,730,000

$ 325,000 $ 7,200,000 $ 19,070,000

$ 325,000 $ 7,200,000 $ 20,580,000
$ 325,000 $ 7,200,000 $ 17,680,000
$ 1,900,000 $ 7,200,000 $ 11,830,000

Total
Consumer
Surplus

$ -
$ 500,000
$ 1,375,000
$ 3,375,000
$ 5,475,000

$ -
$ 1,000,000
$ 5,900,000
$ 7,925,000
$ 14,885,000

$ -
$ 2,500,000
$ 12,300,000
$ 20,400,000
$ 28,800,000

Total
Students Consumer
Surplus
500,000
$ 300,000

$ - $ 4,875,000

$ 2,850,000

$ - $ 7,725,000