Bundling is most likely to be beneficial when fixed costs are ______ and marginal costs are ______.
A) high; high
B) high; low
C) low; high
D) low; low

Question

Quizplus · Accepted Answer

Bundling is most beneficial when fixed costs are high because the costs of creating and marketing individual products can be spread across multiple products, making each product cheaper to produce. Marginal costs should be low so that the cost of producing an additional unit of the bundled product is not too expensive. Therefore, option B, where fixed costs are high and marginal costs are low, is the most appropriate choice.

Bundling Is Most Likely to Be Beneficial When Fixed Costs