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You are asked by the Bookstore to design a pure bundling strategy which sells the mug and the hoodie as a package. The valuation of
You are asked by the Bookstore to design a pure bundling strategy which sells the mug and the hoodie as a package. The valuation of the bundle is the sum of the individual valuations. Assume if students are indifferent between buying and not buying, they choose to buy. Assume the marginal cost of production is zero for both products. You would advise the Bookstore to a. Continue to sell the mug and the hoodie separately b. Stop selling these separately; Bundle and price the bundle at $40 c. Stop selling these separately; Bundle and price the bundle at $42 d. Stop selling these separately; Bundle and price the bundle at $50
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