Charging a higher price on the tied good and a lower price on the monopoly good renders the tie- in strategy:
A)always a better choice than price discrimination.
B)efficient because it does not create deadweight loss.
C)fair because the consumer gets a good deal on the average.
D)an available alternative strategy to extract surplus from the customer.

Question

Quizplus · Accepted Answer

Charging a higher price on the tied good and a lower price on the monopoly good is considered a tie-in strategy, which can be used as an alternative strategy to extract surplus from the customer. This strategy involves bundling or tying a product to another product, where the consumer has no choice but to buy both products. As a result, the firm can charge a higher price for the tied good, which may result in increased profits. However, this strategy is controversial and may lead to some ethical concerns.

Charging a Higher Price on the Tied Good and a Lower