Compare profits with and without pure bundling

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Reference no: EM132152233

Question: Return to the Nalebuff model. Assume that marginal cost of producing products 1 and 2 are both c per unit and of producing the bundle is 2c per unit.

a. Derive the monopoly prices with no bundling and with pure bundling. bundling.

b. Identify a constraint on c such that PB <1.

c. Compare profits with and without pure bundling.

Reference no: EM132152233

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