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 3.b Can the company increase its profit by doing mixed tying? (Mixed tying means the company sells its products both separately and as a bundle. In this problem, the company can set Px, Py, and Pbundle.)

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter2: Choice In A World Of Scarcity
Section: Chapter Questions
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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.
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.)
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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