1. The following table contains valuations for goods X and Y. Suppose that the marginal cost of producing X is 1, and this is equal to the marginal cost of pro- ducing Y. Product X Product Y Consumer type 1 4 3 Consumer type 2 3 3 Consumer type 3 (a) Find the optimal monopoly price in case of pure bundling. (b) Find the optimal monopoly price in case of mixed bundling. Which among strategies a) and b) gives higher profits to the monopolist? Product X Product Y Product X+Y Consumer 1 4 3 7 Consumer 2 3 3 Consumer 3 4. 4.

1. The following table contains valuations for goods X and Y. Suppose that the marginal cost of producing X is 1, and this is equal to the marginal cost of pro- ducing Y. Product X Product Y Consumer type 1 4 3 Consumer type 2 3 3 Consumer type 3 (a) Find the optimal monopoly price in case of pure bundling. (b) Find the optimal monopoly price in case of mixed bundling. Which among strategies a) and b) gives higher profits to the monopolist? Product X Product Y Product X+Y Consumer 1 4 3 7 Consumer 2 3 3 Consumer 3 4. 4.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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