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Economics Buyers of new cars shop for their preferred features - power seats, power steering, sunroof, ABS brakes and leather interior being a few examples.
Economics Buyers of new cars shop for their preferred features - power seats, power steering, sunroof, ABS brakes and leather interior being a few examples. Several options combining some of these features are available from the dealership. Market research has identified three different types of consumers based on survey data. The following schedule gives the reservation prices for the two most popular options at the dealership. Note that the options are mutually exclusive [that is, features offered in one option are not repeated in the other]. Customer Type Option A Option B 1 $7,000 $5,500 2 $5,500 $4,000 3 $9,000 $1,000 Compare the profits from pure bundling, mixed bundling, and selling the options separately assuming that the three types of consumers are roughly equal in proportion
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