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Problem 3 [Bundling] Consider a monopolist selling two goods, A and B. Consumers' valuation of good A is uniformly distributed on the unit line, that

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Problem 3 [Bundling] Consider a monopolist selling two goods, A and B. Consumers' valuation of good A is uniformly distributed on the unit line, that is, 0, ~ U [0, 1], and valuation for good B is positively correlated with good A as follows: 0= 1/4+ 1/2 0, so that 0 ~ U[ 1/4, 3/4]. A. Find out the monopolist's profits if goods A and B are sold separately. B. Find out the monopolist's profits if only the pure bundle AB is sold. C. Does the monopolist obtain larger profits from separate selling than pure bundling? Explain

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