ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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3. Suppose a company produces 2 products, X and Y, and has 3 potential
buyers, A, B, and C. The following table summarizes each potential buyer's
willingness to pay for each good:
A
В
C
4
3
Y
For simplicity, assume there is no production cost.
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Transcribed Image Text:3. Suppose a company produces 2 products, X and Y, and has 3 potential buyers, A, B, and C. The following table summarizes each potential buyer's willingness to pay for each good: A В C 4 3 Y For simplicity, assume there is no production cost.
If the company ties the two products together, what price
should the company charge for the bundle and what will be its profit?
3.a
Can the company increase its profit by doing mixed tying?
(Mixed tying means the company sells its products both separately and as a
3.b
bundle. In this problem, the company can set Px, Py, and Pbundle.)
expand button
Transcribed Image Text:If the company ties the two products together, what price should the company charge for the bundle and what will be its profit? 3.a Can the company increase its profit by doing mixed tying? (Mixed tying means the company sells its products both separately and as a 3.b bundle. In this problem, the company can set Px, Py, and Pbundle.)
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