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You are selling two goods 1 and 2 to a market consisting of three consumers with reservation prices as follows Reservation Price $ Consumer

You are selling two goods, 1 and 2, to a market consisting of three consumers with reservation prices as follows:

 

Reservation Price ($)

Consumer

For 1

For 2

A

20

100

B

60

60

C

100

20

 

The unit cost of each product is $30.

a. Compute the optimal prices and profits for (i) selling the goods separately, (ii) pure bundling, and (iii) mixed bundling.

 

b. Which strategy would be most profitable? Why?

Jun 23 2020 View more View Less

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