MGCR 293 Lecture Notes - Lecture 10: Reservation Price, Economic Surplus, Io9
4 Apr 2016
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M an a ge r i al e c o n o m ics. This chapter can be very confusing at first. The best way to approach any bundling question is to take it very slow and draw it all out properly. As well, practice is key when it comes to mixed bundling, there is very little to memorize and the only way to get better at these questions is to do as many as possible. When two products are sold together: they can be complements or substitutes. The optimal solution yields the greatest profit of the profit maximizing solutions given by separate pricing, pure bundling and mixed bundling. Separate price: write out reservation prices, make sure to take into account costs, solution must always be a reservation price. Consumers cannot buy separately: calculate reservation prices per consumer for the bundle, make sure to take into account costs, solution must always be a bundle reservation price.
