6. Bundling You are selling two goods, 1 and 2, to a market consisting of three consumers with reservationprices as follows:Reservation Price ($)ConsumerFor 1For 2А20100В6060C10020The unit cost of each product is $30.(a) Compute the optimal prices and profits for (i) selling the goods separately, (ii) pure bundling, and(iii) mixed bundling.(b) Which strategy would be most profitable? Why?

(a) (i) Selling the goods separately, the seller will not charge a price below $30 as that is the…

Bundling You are selling two goods, 1 and 2, to a market consisting of three consumers with reservation prices as follows: Reservation Price ($) For 1 Consumer For 2 A 20 100 60 60 C 100 20 The unit cost of each product is $30. (a) Compute the optimal prices and profits for (i) selling the goods separately, (ii) pure bundling, and (iii) mixed bundling. (b) Which strategy would be most profitable? Why?

Bundling You are selling two goods, 1 and 2, to a market consisting of three consumers with reservation prices as follows: Reservation Price ($) For 1 Consumer For 2 A 20 100 60 60 C 100 20 The unit cost of each product is $30. (a) Compute the optimal prices and profits for (i) selling the goods separately, (ii) pure bundling, and (iii) mixed bundling. (b) Which strategy would be most profitable? Why?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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