Bundling & Two-part tariff Flashcards Preview

EC2001 - Intermediate Microeconomics > Bundling & Two-part tariff > Flashcards

Flashcards in Bundling & Two-part tariff Deck (5)
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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