Bundling & Two-part tariff Flashcards
Why do firms sell goods in bundles?
cost saving and complementaries among the good involved
Why do firms sell goods in bundles and examples
Cost saving:
it is often less expensive to sell several articles stapled together than it is to sell each of them separately, for example cutting transport cost
Complementaries among the good involved:
software programs sold in bundles often work together more efficiently than off the shelf-programs
How to price determined when selling to several different people
When you sell an item to several people, the price is determined by the purchaser who has the lowest willingness to pay
What happens when there’s a diverse valuation of the individual
the diverse valuation of the individual, the lower the price you have to charge to sell at a given number of items
What is two - part tariffs
the price that people are willingly to pay to get into the park will depend on the price they’re willing to pay for the rides
