If Ben values good X more than good Y,and Catherine values good Y more than good X,a firm can increase its profits by
A) charging the same price for both goods.
B) bundling the goods.
C) selling the goods in a competitive market.
D) charging one price per good.

Question

Quizplus · Accepted Answer

By bundling the goods, the firm can offer a package deal that includes both goods at a slightly higher price than if the goods were sold separately. This way, Ben and Catherine will both be willing to pay more than they would if they had to buy the goods separately. Thus, the firm can increase its profits by bundling the goods.

If Ben Values Good X More Than Good Y,and Catherine