Consider two potential book buyers, Tom and Jane, who are considering whether to purchase two books, book A and book B. Assume that the maximum Tom is willing to pay for book A is $40, while he is willing to pay $25 for book B. Jane is willing to pay $25 for book A and $40 for book B.
(a) If each book is sold at $40, how much revenue will the seller receive?
(b) If each book is sold for $25, how much revenue will the seller receive?
(c) If the seller ties or bundles the two books together, what price should she charge? What will the sellers profit be?
(d) Why does tying or bundling increase revenue?

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The Answer of Consider two potential book buyers, Tom and Jane, who are considering whether to purchase two books, book A and book B. Assume that the maximum Tom is willing to pay for book A is $40, while he is willing to pay $25 for book B. Jane is willing to pay $25 for book A and $40 for book B.
(a) If each book is sold at $40, how much revenue will the seller receive?
(b) If each book is sold for $25, how much revenue will the seller receive?
(c) If the seller ties or bundles the two books together, what price should she charge? What will the sellers profit be?
(d) Why does tying or bundling increase revenue?

Consider Two Potential Book Buyers, Tom and Jane, Who Are