Mixed bundling is more profitable than pure bundling when
A) the marginal cost of each good being sold is positive.
B) the consumers' reservation values of each good being sold are not perfectly negatively correlated with one or another.
C) Both A and B are correct.
D) the marginal cost of one good is zero.
C
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The basic assumption behind the J-curve effect is that
A) supply and demand for currencies are less elastic in the short run than in the long run. B) in the short run, supply will exceed demand; in the long run, they will be equal. C) an overshooting effect occurs as people adjust to the new information. D) investors tend to be overly cautious in currency instruments.
For a given market demand curve, if the market clearing price increases, then the amount of producer surplus will
A) decrease. B) increase. C) become negative. D) none of the above due to insufficient information.