Mixed bundling is sometimes the most profitable strategy for a firm:
A)because the firm can more accurately assess the reservation price of each consumer.
B)because consumers prefer to spend in binges and make multiple purchases at the same time.
C)when the firm has high delivery or shipping costs.
D)because this strategy discourages a customer from buying a component when his/her willingness to pay is less than the marginal cost of a component of the purchase.

Question

Quizplus · Accepted Answer

Mixed bundling discourages customers from buying a component when their willingness to pay for it is less than the marginal cost of the component. This allows the firm to maximize profits and avoid selling products at a loss. Mixed bundling can discourage a customer from buying a component when their willingness to pay for it is less than the marginal cost of the component. In this way, the firm can avoid selling components at a loss and increase its profits.

Mixed Bundling Is Sometimes the Most Profitable Strategy for a Firm