Karl values Word at $100 and Excel at $40, and Adam values Word at $20 and Excel at $90. How much more does the seller make if it bundles than if it sells the products individually?
A) $10
B) $20
C) $30
D) $40

Question

Quizplus · Accepted Answer

By bundling Word and Excel together, the seller can charge $120 (Karl's total valuation) and sell to Karl. Individually, the seller would charge $100 for Word (to Karl) and $90 for Excel (to Adam), totaling $190. The difference is $190 - $120 = $70, so the seller makes $30 less by bundling.

Karl Values Word at $100 and Excel at $40, and Adam