each of the journals is va = $2,000, vg scription prices, to which journals does t
each of the journals is va = $2,000, vg scription prices, to which journals does t
Chapter1: Financial Statements And Business Decisions
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![[Q: 12-4490747] The publisher Reed Elsevier uses a mixed-bundling pricing strategy. The publisher sells a university access to a bundle of 930 of its journals for $1.7
million for one year. It also offers the journals separately at individual prices. Because Elsevier offers the journals online (with password access), universities can track
how often their students and faculty access journals and then cancel those journals that are seldom read.
Suppose that a publisher offers a university only three journals-A, B, and C-at the unbundled, individual annual subscription prices of pA = $1,600, pg = $800, and
Pc = $1,500. Suppose a university's willingness to pay for each of the journals is va = $2,000, vg = $1,100, and vc = $1,400.
If the publisher offers the journals only at the individual subscription prices, to which journals does the university subscribe?
O A. Joumals B and C only.
B. Journal B only.
C. Journal C only.
D. Journal A only.
E. Journals A and B only.
Given these individual prices, what is the highest price that the university is willing to pay for the three journals bundled together in a mixed bundle?
The university is willing to pay $ 3800 . (Round your answer to the nearest dollar.)
Now suppose that the publisher offers the same deal to a second university with willingness-to-pay va = $1,800, vg = $100, and vc = $2,100. With the two universities,
calculate the revenue-maximizing individual and bundle prices. (Round all answers to the nearest dollar.)
Journal
price
1's reservation price 2's reservation price
A
1800
2,000
1,800
B
1100
1,100
100
1400
1,400
2,100
Bundle
4000
4,500
4,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc67afd47-73a6-45ab-b513-dac9a3557eea%2F96f7a12b-a166-4969-96f0-1c0f58dc7f0c%2Fc43k23g_processed.jpeg&w=3840&q=75)
Transcribed Image Text:[Q: 12-4490747] The publisher Reed Elsevier uses a mixed-bundling pricing strategy. The publisher sells a university access to a bundle of 930 of its journals for $1.7
million for one year. It also offers the journals separately at individual prices. Because Elsevier offers the journals online (with password access), universities can track
how often their students and faculty access journals and then cancel those journals that are seldom read.
Suppose that a publisher offers a university only three journals-A, B, and C-at the unbundled, individual annual subscription prices of pA = $1,600, pg = $800, and
Pc = $1,500. Suppose a university's willingness to pay for each of the journals is va = $2,000, vg = $1,100, and vc = $1,400.
If the publisher offers the journals only at the individual subscription prices, to which journals does the university subscribe?
O A. Joumals B and C only.
B. Journal B only.
C. Journal C only.
D. Journal A only.
E. Journals A and B only.
Given these individual prices, what is the highest price that the university is willing to pay for the three journals bundled together in a mixed bundle?
The university is willing to pay $ 3800 . (Round your answer to the nearest dollar.)
Now suppose that the publisher offers the same deal to a second university with willingness-to-pay va = $1,800, vg = $100, and vc = $2,100. With the two universities,
calculate the revenue-maximizing individual and bundle prices. (Round all answers to the nearest dollar.)
Journal
price
1's reservation price 2's reservation price
A
1800
2,000
1,800
B
1100
1,100
100
1400
1,400
2,100
Bundle
4000
4,500
4,000
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