You have two goods, 1 and 2, each with a unit cost of $30. You are selling to a market consisting ofthree consumers (each wanting at most one unit of each product) with reservation prices asfollows:Reservation Price ($)For 1ConsumerFor 2Peter20100Paul6060Mary10020 ) In the mixed bundling case, your optimal strategy is to charge $99.99 for good 1, $99.99 forgood 2, and $120 for the bundle. Which of the three strategies (selling separately, purebundling, or mixed bundling) would be most profitable? Why?

Financial Management: Financial management comprises of two words i.e. Finance and management.…

In the mixed bundling case, your optimal strategy is to charge $99.99 for good 1, $99.99 for good 2, and $120 for the bundle. Which of the three strategies (selling separately, pure bundling, or mixed bundling) would be most profitable? Why?

In the mixed bundling case, your optimal strategy is to charge $99.99 for good 1, $99.99 for good 2, and $120 for the bundle. Which of the three strategies (selling separately, pure bundling, or mixed bundling) would be most profitable? Why?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

You have two goods, 1 and 2, each with a unit cost of $30. You are selling to a market consisting of
three consumers (each wanting at most one unit of each product) with reservation prices as
follows:
Reservation Price ($)
For 1
Consumer
For 2
Peter
20
100
Paul
60
60
Mary
100
20

) In the mixed bundling case, your optimal strategy is to charge $99.99 for good 1, $99.99 for
good 2, and $120 for the bundle. Which of the three strategies (selling separately, pure
bundling, or mixed bundling) would be most profitable? Why?

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