Question 42: A firm sells two products X and Y in a market with three consumers with the corresponding reservation prices: Consumer Reservation Price for X Reservation Price for Y 1 20 100 2 60 60 3 100 20 For both X and Y, the marginal cost is 30. (Profit = total revenues - the sum of MCs of all units sold) a. Compute for the the optimal prices and profits if X and Y are sold separately. b. Compute for the optimal price and profits if X and Y are only sold as a package. (Pure bundling) c. Compute for the optimal prices and profits if the firm sells X and Y separately and as a package (mixed bundling)

Question 42: A firm sells two products X and Y in a market with three consumers with the corresponding reservation prices: Consumer Reservation Price for X Reservation Price for Y 1 20 100 2 60 60 3 100 20 For both X and Y, the marginal cost is 30. (Profit = total revenues - the sum of MCs of all units sold) a. Compute for the the optimal prices and profits if X and Y are sold separately. b. Compute for the optimal price and profits if X and Y are only sold as a package. (Pure bundling) c. Compute for the optimal prices and profits if the firm sells X and Y separately and as a package (mixed bundling)

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter18: Asymmetric Information

Section: Chapter Questions

Problem 18.3P

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