Q1.1-1.3 thanks 1 Bundling Suppose that a firm sells two different goods, A and B, to...

2.1) consumer purchases the product which have. high utility which means they consider the Surplus which has greater value Suoplus - Maximum willingness to pay Actual poice of the good. for example if consumer is willing to pay & 10 but actual price of good = $6 then the Surplus - $4 Given that consumer 1 willkorg to pay 18 n for Product A and consumer 2 willing to 49 for the same.

So here Susplus = 9.8.4 = 0.6 So surplus must be equal or greater than - 0.6 to achieve optimal profits

from price the given data the can see the highest for produd B that is purchased by 08 Consumer 2 which 823 So here the optimal ponce would be difference. of consumer z's maximum willingness to pay for produd B and surplus. Surplus - Consumer 2's maximum uillingness to pay Product B - optimal price opd 0.6= 23- optimal price optimal price = 23-0.6 = 22.4 Product & optimal parce = $22.4 The optimal price of produd A= 88.4 which is maximum willingness to pay by Consumer 1

offered. Total revenue salsed by the the tulo products separately from if it $328 he 1.2) Consumer 1 purchase the both products for $27.3 and consumer a purchase the. beth products for $328 $32.

So, here consumer z's willingness pay is. greater than consumer is willingnesspay so total revenue raused by a bundling. strategy = $32 13) Nc. bending is not more profitable strategia than marketing the two produd separately because sepascide pooduds will get the maxim. - um profits with selected and targeted.

Consumer and we can see $32.80 8.30