3. (5 points) Three consumers who want to buy a computer and a printer have the following valuations for options offered by the store: Laptop Printer Consumer 1 $800 $100 Bundle $900 Consumer 2 $1,000 $50 $1,050 Consumer 3 $600 $150 $750 (a) If the store charges $ 600 for a laptop and $50 for a printer, what will its total revenue be from these three customers? (b) If the store charges $800 for a laptop and $100 for a printer, what will its total revenue be from these three customers. (c) If you look at the revenue ONLY from laptops, is the total revenue from laptops higher at a price of $600 or a price of $800 from these three customers? Please show your calculations. Suppose that the store bundles laptops and printers together and sells them as a bundle and does not sell them separately any longer. The consumers can no longer buy the goods separately, they will either have to buy a bundle containing both goods or buy nothing. The prices that the consumers are willing to pay for the bundle are given in the above table. All of this is true for the remaining parts of the question. (d) What is the firm's revenue from charging $900 for a bundle? (e) What is the firm's revenue from charging $750 for the bundle? (Hint: If the price charged is greater than what the consumer is willing to pay, then the consumer will not buy that good (bundle)).
3. (5 points) Three consumers who want to buy a computer and a printer have the following valuations for options offered by the store: Laptop Printer Consumer 1 $800 $100 Bundle $900 Consumer 2 $1,000 $50 $1,050 Consumer 3 $600 $150 $750 (a) If the store charges $ 600 for a laptop and $50 for a printer, what will its total revenue be from these three customers? (b) If the store charges $800 for a laptop and $100 for a printer, what will its total revenue be from these three customers. (c) If you look at the revenue ONLY from laptops, is the total revenue from laptops higher at a price of $600 or a price of $800 from these three customers? Please show your calculations. Suppose that the store bundles laptops and printers together and sells them as a bundle and does not sell them separately any longer. The consumers can no longer buy the goods separately, they will either have to buy a bundle containing both goods or buy nothing. The prices that the consumers are willing to pay for the bundle are given in the above table. All of this is true for the remaining parts of the question. (d) What is the firm's revenue from charging $900 for a bundle? (e) What is the firm's revenue from charging $750 for the bundle? (Hint: If the price charged is greater than what the consumer is willing to pay, then the consumer will not buy that good (bundle)).
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Transcribed Image Text:3. (5 points) Three consumers who want to buy a computer and a printer have the following
valuations for options offered by the store:
Laptop
Printer
Consumer 1
$800
$100
Bundle
$900
Consumer 2
$1,000
$50
$1,050
Consumer 3
$600
$150
$750
(a) If the store charges $ 600 for a laptop and $50 for a printer, what will its total revenue be
from these three customers?
(b) If the store charges $800 for a laptop and $100 for a printer, what will its total revenue be
from these three customers.
(c) If you look at the revenue ONLY from laptops, is the total revenue from laptops higher at a
price of $600 or a price of $800 from these three customers? Please show your calculations.
Suppose that the store bundles laptops and printers together and sells them as a bundle and does
not sell them separately any longer. The consumers can no longer buy the goods separately, they
will either have to buy a bundle containing both goods or buy nothing. The prices that the
consumers are willing to pay for the bundle are given in the above table. All of this is true for the
remaining parts of the question.
(d) What is the firm's revenue from charging $900 for a bundle?
(e) What is the firm's revenue from charging $750 for the bundle?
(Hint: If the price charged is greater than what the consumer is willing to pay, then the consumer
will not buy that good (bundle)).
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