A company supplies two products, DVD discs and DVD storage cases, to two different segments of customers (1 and 2).The following table summarizes the value that the typical customer in each segment assigns to the products offered.

Customer Type

Disc 1- $6, 2-$7

Cases 1-$8, 2-$5

Assume that there are 10 customers of each type, that there are no fixed costs, and that the marginal costs of producing discs and cases are both constant and zero.

a. What is the pricing strategy for the company if it prices the products individually?What is the corresponding profit?

b. If the company decides to offer discs and cases in a bundle, what price should it charge for the bundle?Is bundling a better strategy in this case? Explain.