A manufacturer faces the demand function, 20Q + 5P = 120 (where Q is quantity and P is price), and has the marginal cost function, MC = 1+0.8Q. If the manufacturer maximises revenue instead of profit, how will this affect consumer surplus?

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A: A competitive firm is one of many firms that produce identical goods.

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A: C1 = 50 + 0.1Q12 and C2 = 30 + 0.05Q22. The demand it faces is Q = 500 - 10P.

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Product and Price Bundling

Product and price bundling is used as a marketing strategy by businesses, where complementary products and services are combined and sold as a package deal. This bundled price is usually less than the total price of the individual products if they were to be sold separately. When bundled and sold, each product is sold at a reduced price. Using a price bundling strategy helps increase the average revenue per user and also increases the engagement with the user. This happens as the perceived value of the bundled products is more than the individual products.