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
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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Other things constant, which person is willing to save more?
A) One that has a higher rate of time preference B) One that has a lower rate of time preference C) One that has no rate of time preference D) One that has no consideration about the value of goods now and in the future
Consumers and firms are known as price takers only if
A) no market exists to determine the equilibrium price. B) they can set the market price. C) they cannot unilaterally affect the market price. D) excess demand exists.