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this s the question 4. I smell fall! You run a small local farm that grows and sells apples and pumpkins. Suppose you have three

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this s the question

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4. I smell fall! You run a small local farm that grows and sells apples and pumpkins. Suppose you have three consumers (I said \"small\"l). Each of these three consumers' willingness to pay is listed in the table below: Apples (1 bag) Pumpkins (1) Abe $1.20 $4.00 Belinda $2.60 $2.60 Caroline $4.00 $1.20 (a) Suppose your marginal cost of producing apples and pumpkins is zero. If you sell your two goods separately, what is the optimal price for each? How much prot will you make? (b) Suppose you bundle your goods together, such that a consumer can only buy a bundle containing one bag of apples and one pumpkin. (The consumer can't buy the goods individually.) What price should you set for the bundle? How much prot do you make? (c) You're considering offering the goods individually as well as in a bundle. Is this worthwhile to do? Explain. (Hint: you can pick the price of the bundle as well as the individual prices. Think about consumer surplus and what each customer would choose to buy.) (1 Turns out that our mar inal cost of production isn't zero! Suppose that it costs ou $2.00 to 3' g Y produce each bag of apples and $2.00 to produce each pumpkin. Redo parts (a) and (b). (e) (Optional) Redo part (c) with the assumption of the $2 marginal cost. (This is trickier! But give it a shot. Hint: You'd rather not sell apples to Abe, so can you make more money by having him only buy a pumpkin instead of the bundle? How would you do that? Then think about Caroline in the same way.)

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