2) (i) You own the only vegan burger shop in a town that has 100 consumers. Consumers' willingness to pay (WTP) for the first vegan burger is RM20, the second is RM16, the third is RM4, the fourth is RM3, and the fifth is RM0. The marginal cost for making a vegan burger is RM5. To celebrate the town's birthday, you have decided to either launch a "Buy 2 Get 1 Free" or "Buy 3 Get 2 Free" campaign. Justify the plan you choose to implement and indicate which among these two plans induces higher social welfare. [13-marks] (ii) You opened the first vegan burger shop in a neighboring town where the WTP for the town's two types of consumers is listed below. Charging different prices for the same product is illegal. Assume zero marginal cost for burgers and fries. Assume that there are 100 Type A and 100 Type B consumers. WTP for burger WTP for fries Type A RM50 RM10 RM15 B RM40 3 (a) Without bundling, how much would you charge for a burger and a packet of fries? Calculate the profit and total consumer surplus. [4-marks] (b) Would bundling result in profit that is higher than that found in (a)? Additionally, explain how bundling is akin to price discrimination, and indicate whether consumers are better or worse off than they were in (a). [8-marks] 2) (i) You own the only vegan burger shop in a town that has 100 consumers. Consumers' willingness to pay (WTP) for the first vegan burger is RM20, the second is RM16, the third is RM4, the fourth is RM3, and the fifth is RM0. The marginal cost for making a vegan burger is RM5. To celebrate the town's birthday, you have decided to either launch a "Buy 2 Get 1 Free" or "Buy 3 Get 2 Free" campaign. Justify the plan you choose to implement and indicate which among these two plans induces higher social welfare. [13-marks] (ii) You opened the first vegan burger shop in a neighboring town where the WTP for the town's two types of consumers is listed below. Charging different prices for the same product is illegal. Assume zero marginal cost for burgers and fries. Assume that there are 100 Type A and 100 Type B consumers. WTP for burger WTP for fries Type A RM50 RM10 RM15 B RM40 3 (a) Without bundling, how much would you charge for a burger and a packet of fries? Calculate the profit and total consumer surplus. [4-marks] (b) Would bundling result in profit that is higher than that found in (a)? Additionally, explain how bundling is akin to price discrimination, and indicate whether consumers are better or worse off than they were in (a). [8-marks]