Question 3 The University of Ruritania bookstore is the monopoly seller of two types of books: one in eco- nomics and another in mathematics. It acquires the books from suppliers for $35 each. Three types of students are considering purchasing the books: students only majoring in math (M), students only majoring in economics (E), and ones obtaining a double major (M&E). There are an equal number of students of each type. Each student is interested in purchasing at most one copy of each book. The RPs of each student of each type for each kind of book are displayed in the table below. M E M & E math textbooks econ textbooks 10 60 46 60 10 46 1. What is the optimal price if the bookstore chooses individual pricing? 2. What is the optimal price if the bookstore chooses pure bundling? The RP of a bundle is the sum of the individual RPs. Compared to individual pricing, which one will the bookstore prefer? 3. What is the optimal mixed bundling strategy? The RP of a bundle is the sum of the individual RPs. Which pricing strategy maximizes the bookstore's profits?

Question 3 The University of Ruritania bookstore is the monopoly seller of two types of books: one in eco- nomics and another in mathematics. It acquires the books from suppliers for $35 each. Three types of students are considering purchasing the books: students only majoring in math (M), students only majoring in economics (E), and ones obtaining a double major (M&E). There are an equal number of students of each type. Each student is interested in purchasing at most one copy of each book. The RPs of each student of each type for each kind of book are displayed in the table below. M E M & E math textbooks econ textbooks 10 60 46 60 10 46 1. What is the optimal price if the bookstore chooses individual pricing? 2. What is the optimal price if the bookstore chooses pure bundling? The RP of a bundle is the sum of the individual RPs. Compared to individual pricing, which one will the bookstore prefer? 3. What is the optimal mixed bundling strategy? The RP of a bundle is the sum of the individual RPs. Which pricing strategy maximizes the bookstore's profits?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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