A monopolist produces both Good A and Good B. There are two types of consumers. Enthusiasts are willing to pay 10 for Good A and 7 for Good B. Marginals are willing to pay 1 for Good A and 6 for Good B. There are 10 of each type of consumer. The monopolist has a choice between bunding the two goods together, or pricing them individually. O a. The Willingness to pay is NOT negatively correlated, and the firm should bundle. O b. The Willingness to pay is negatively correlated, and the firm should price items individually. OC. The Willingness to pay is negatively correlated, and the firm should bundle. Od. The Willingness to pay is NOT negatively correlated, and the firm should price items individually.
A monopolist produces both Good A and Good B. There are two types of consumers. Enthusiasts are willing to pay 10 for Good A and 7 for Good B. Marginals are willing to pay 1 for Good A and 6 for Good B. There are 10 of each type of consumer. The monopolist has a choice between bunding the two goods together, or pricing them individually. O a. The Willingness to pay is NOT negatively correlated, and the firm should bundle. O b. The Willingness to pay is negatively correlated, and the firm should price items individually. OC. The Willingness to pay is negatively correlated, and the firm should bundle. Od. The Willingness to pay is NOT negatively correlated, and the firm should price items individually.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![A monopolist produces both Good A and Good B. There are two types of consumers. Enthusiasts are willing to pay 10 for Good A and 7 for Good B. Marginals are willing to pay 1 for Good A and 6 for Good B. There
are 10 of each type of consumer. The monopolist has a choice between bunding the two goods together, or pricing them individually,
O a. The Willingness to pay is NOT negatively correlated, and the firm should bundle.
O b. The Willingness to pay is negatively correlated, and the firm should price items individually.
O c. The Willingness to pay is negatively correlated, and the firm should bundle.
Od. The Willingness to pay is NOT negatively correlated, and the firm should price items individually.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9ec5140f-5257-476e-b974-1f88a29fc606%2F704e403c-f7ef-48db-8fe2-648711519181%2Fdgdmr3_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A monopolist produces both Good A and Good B. There are two types of consumers. Enthusiasts are willing to pay 10 for Good A and 7 for Good B. Marginals are willing to pay 1 for Good A and 6 for Good B. There
are 10 of each type of consumer. The monopolist has a choice between bunding the two goods together, or pricing them individually,
O a. The Willingness to pay is NOT negatively correlated, and the firm should bundle.
O b. The Willingness to pay is negatively correlated, and the firm should price items individually.
O c. The Willingness to pay is negatively correlated, and the firm should bundle.
Od. The Willingness to pay is NOT negatively correlated, and the firm should price items individually.
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