Question
Suppose we have 5 people who might attend up to 2 theatre shows at the local theatre. There's a drama and a comedy. The marginal
Suppose we have 5 people who might attend up to 2 theatre shows at the local theatre. There's a drama and a comedy. The marginal cost of a seat on any given night is both constant and negligible (you can safely ignore it), so profit maximization and revenue maximization amount to the same thing. Below are the maximum willingness to pay values (a person will pay a price up to that value, but no greater) for a seat for each of the 5 people for the two shows.
Is there any benefit to offering a pure bundle (i.e., no option to buy a ticket to a single performance)? If so, what is the pure bundle price and how do the revenues compare to the question above?
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