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Question #3 Bundling A car manufacturer can add in two types of amenities into the new cars that it produces air conditioning and power brakes.

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Question #3 Bundling A car manufacturer can add in two types of amenities into the new cars that it produces air conditioning and power brakes. Suppose that there are three types of consumers that vary in their willingness to pay for each item. The table below summarizes each type of consumer's marginal benefit and the manufacturer's marginal cost of production. Air Conditioner Power Brakes Consumer 1's MB $1,000 $500 Consumer 2's MB $800 $300 Consumer 3's MB $100 $800 Manufacturer's MC $400 $200 If the car manufacturer offers air conditioning and power brakes as a bundle, what price should they charge for the bundle to maximize profits? Which of the consumer types would buy this bundle

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