Suppose the firm notices that consumers tend to buy both Good A and Good B. As a result, the firm considers practicing bundling. The information below shows the maximum price each consumer (Consumer 1 and Consumer 2) is willing to pay for each individual good. Consumer 1: Maximum price for Good A = $400 Maximum price for Good B = $250 Consumer 2: Maximum price for Good A = $600 Maximum price for Good B = $100 1.1 What is the maximum amount of revenue that the firm can generate if it sells Good A and Good B separately (without bundling)? 1.2 Calculate the profit maximising bundling price

Suppose the firm notices that consumers tend to buy both Good A and Good B. As a result, the firm considers practicing bundling. The information below shows the maximum price each consumer (Consumer 1 and Consumer 2) is willing to pay for each individual good. Consumer 1: Maximum price for Good A = $400 Maximum price for Good B = $250 Consumer 2: Maximum price for Good A = $600 Maximum price for Good B = $100 1.1 What is the maximum amount of revenue that the firm can generate if it sells Good A and Good B separately (without bundling)? 1.2 Calculate the profit maximising bundling price

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section: Chapter Questions

Problem 1SQ

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