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Costs of production for both products

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You are the monopoly seller of computers and monitors. Remarkably, the costs of production for both products are zero. You sell to a market consisting of two segments (A and B). The RP's of each segment for computers and monitors are the following:

A's RP: Computer: $2,000 Monitor: $200
B's RP: Computer: $1,500 Monitor: $300

There are an equal number in each segment. A buyer can choose to buy one product and not the other.

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1) If you were selling computers and monitors separately, what price should you charge for each to maximize revenue?

2) If you were to bundle the computer and monitor together and sell only the bundle, what price should you set to maximize revenue?

3) Could you generate more revenue than in parts (1) and (2) through mixed bundling?

Reference no: EM13893798

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