2) ABC Corp. is selling a children's alphabet book and an iPad app. Suppose the reservation prices for four consumers are given by the table below: Desmond Cost Betsy 12 Carolyn 7 Aaron 4 3 Вook 11 5 App 2. 9. 10 a) If ABC prices them separately, what prices should it charge, and how much profit does it make? b) If the Corp. prices the products as a bundle, and only offers the bundle, what price should it charge and how much profit does it make? c) If ABC Corp. offers the book or app separately but also offers a bundle, what prices should it charge, and how much profit does it make?

2) ABC Corp. is selling a children's alphabet book and an iPad app. Suppose the reservation prices for four consumers are given by the table below: Desmond Cost Betsy 12 Carolyn 7 Aaron 4 3 Вook 11 5 App 2. 9. 10 a) If ABC prices them separately, what prices should it charge, and how much profit does it make? b) If the Corp. prices the products as a bundle, and only offers the bundle, what price should it charge and how much profit does it make? c) If ABC Corp. offers the book or app separately but also offers a bundle, what prices should it charge, and how much profit does it make?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Product and Price Bundling

Product and price bundling is used as a marketing strategy by businesses, where complementary products and services are combined and sold as a package deal. This bundled price is usually less than the total price of the individual products if they were to be sold separately. When bundled and sold, each product is sold at a reduced price. Using a price bundling strategy helps increase the average revenue per user and also increases the engagement with the user. This happens as the perceived value of the bundled products is more than the individual products.

Question

2)
ABC Corp. is selling a children's alphabet book and an iPad app. Suppose the reservation
prices for four consumers are given by the table below:
Desmond
Cost
Betsy
12
Carolyn
7
Aaron
4
3
Вook
11
5
App
2.
9.
10
a) If ABC prices them separately, what prices should it charge, and how much profit
does it make?
b) If the Corp. prices the products as a bundle, and only offers the bundle, what price
should it charge and how much profit does it make?
c) If ABC Corp. offers the book or app separately but also offers a bundle, what prices
should it charge, and how much profit does it make?

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