Author Question: Copier Repairs When Kodak leased large photocopiers to businesses, they also bundled a maintenance ... (Read 55 times)

NClaborn · **on:** Jul 1, 2018

Copier Repairs When Kodak leased large photocopiers to businesses, they also bundled a maintenance contract for periodic repairs. Third-party repair firms claimed that Kodak violated antitrust laws because this bundle guaranteed Kodak a monopoly on repairs and excluded competitors' access. Why might the bundle have created value over what third-party repair shops could offer?

Question 2

Suppose the monopolist only sold the goods separately. What price will the monopolist charge for Good 2 to maximize revenues for good 2?
a. 2,300
b. 2,800
c. 1,200
d. 1,700

ky860224 · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

Kodak is worried that a poor quality repairman will blame his failure to fix a broken photocopier on a poor Kodak machine. Repairmen who experience unexpected difficulties would not want to reveal their own incompetence. Instead, they can claim to the customer that Kodak just produces poor equipment. A repairman who is a Kodak employee has no incentive to shift the blame.

Answer to Question 2

c