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Satsume Satsume
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5 years ago
Trisha's Fashion Boutique sells earrings and pendants.  Trisha has two types of customers.  Their willingness-to-pay for earrings and pendants are given in the table below.  If Trisha bundles the earrings and pendants together, could she increase revenue?

   Earrings   Pendant
Type I   100   65
Type II   90   75
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Microeconomics

Microeconomics


Edition: 8th
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Bart_argBart_arg
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If Trisha bundles the products together and sells the bundle for $165, each of her customers will be willing to buy the bundle.  Without bundling, Trisha would need to sell the earrings for $90 and the pendants for $65 in order to sell each customer both items.  Thus, revenue from both items is $155 for each customer.  Bundling increases Trisha's revenues by $10 per customer.
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Satsume Author
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5 years ago
Brilliant ツ
bioc
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Yesterday
You make an excellent tutor!
jamesbove
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2 hours ago
Good timing, thanks!
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