Author Question: What is a better pricing strategy for the monopolist? At this price, what are the total profits to ... (Read 38 times)

littleanan · **on:** Jul 1, 2018

What is a better pricing strategy for the monopolist? At this price, what are the total profits to the monopolist?
a. Bundle the goods at 2,800 . Profits=5,600
b. Bundle the goods at 4,000 . Profits=8,000
c. Charge 2,800 for good 1 and charge 1,700 for good 2; Profits=4,500
d. Charging the lowest price for each good individually is the best pricing strategy; profits = 7,000

Question 2

With only two goods, x and y, if x and y are gross substitutes, a rise in px must necessarily:
a. increase spending in x.
b. reduce spending in x.
c. increase spending in y.
d. reduce spending in y.