Bundling can increase efficiency especially when:

Question

Quizplus · Accepted Answer

Bundling is most efficient when fixed costs are high and marginal costs are low. This is because when fixed costs are high, it is more economical to spread them over a larger number of units, which is achieved through bundling. Additionally, when marginal costs are low, the cost of producing additional units is relatively small, making it feasible to offer multiple products at a lower price through bundling. Hence, option C is the best choice.

Bundling Can Increase Efficiency Especially When