What are the optimal prices and profits for pure bundling. 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

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What are the optimal prices and profits for pure bundling.

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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Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

Question

What are the optimal prices and profits for pure bundling.

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

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