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?