Why is bundling of unrelated products, one of which is available in the competitive market, a losing strategy?
Bundling of unrelated products is likely to reduce a monopolist's profit. If a monopolist bundles two goods, one of which is available in the free market, the bundled product will not appeal to many people in the market. The monopolist loses those customers who have such low valuations of the competitive product that they are unwilling to buy the bundled version, while they would have purchased the monopolized product had it been offered unbundled.Offering only the bundle deprives the monopolist of potential profits.
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In general, all markets equilibrate at the same speed
Indicate whether the statement is true or false
One reason the housing bubble occurred is because:
A. the recency effect caused homes to typically be undervalued. B. securitization removed much of the risk from the sellers of subprime mortgages. C. the herd instinct caused everyone to believe home prices would continue to fall. D. All of these statements are true.