A computer store sells WP and SS. Given below are the maximum amounts two consumers will pay for these goods and for a bundle that contains both goods. WP SS Bundle carolina $100 $90 $190 shawn $90 $40 $130 (a) What is the firm’s revenue if it sells the WP at a price of $90 and the SS at a price of $90? The goods are only available individually and not as a bundle. Please show your calculations. (b) Will the firm charge $130 or $190 for the bundle if it wants to earn maximum revenue? Assume that the goods are only sold as a bundle and not available separately. Please explain. (c) Will selling individually or selling a bundle result in higher revenues?
A computer store sells WP and SS. Given below are the maximum amounts two consumers will pay for these goods and for a bundle that contains both goods. WP SS Bundle carolina $100 $90 $190 shawn $90 $40 $130 (a) What is the firm’s revenue if it sells the WP at a price of $90 and the SS at a price of $90? The goods are only available individually and not as a bundle. Please show your calculations. (b) Will the firm charge $130 or $190 for the bundle if it wants to earn maximum revenue? Assume that the goods are only sold as a bundle and not available separately. Please explain. (c) Will selling individually or selling a bundle result in higher revenues?
Chapter13: Monopoly And Antitrust
Section: Chapter Questions
Problem 13P
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Question
A computer store sells WP and SS. Given below are the
maximum amounts two consumers will pay for these goods and for a bundle that contains both
goods.
| WP | SS |
Bundle |
|
| carolina | $100 | $90 | $190 |
| shawn | $90 | $40 | $130 |
(a) What is the firm’s revenue if it sells the WP at a price of $90 and the SS
at a price of $90? The goods are only available individually and not as a bundle. Please show
your calculations.
(b) Will the firm charge $130 or $190 for the bundle if it wants to earn maximum revenue?
Assume that the goods are only sold as a bundle and not available separately. Please explain.
(c) Will selling individually or selling a bundle result in higher revenues?
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