Suppose Two Types of Consumers Buy Suits

question 122

Multiple Choice

Suppose two types of consumers buy suits.Consumers of type A will pay $100 for a coat and $50 for pants.Consumers of type B will pay $75 for a coat and $75 for pants.The firm selling suits faces no competition and has a marginal cost of zero.The optimal commodity bundling strategy is:

• A) Charge $150 for a suit.
• B) Charge $75 for a suit.
• C) Charge $100 for a suit.
• D) Charge $125 for a suit.

---

Definitions:

Electrically Charged

A state of having an imbalance in the number of protons and electrons, resulting in a positive or negative electrical charge.

Electrically Neutral

A state in which an object or system has an equal number of positive and negative charges, resulting in no overall net charge.

Electrons

Negatively charged subatomic particles orbiting the nucleus of an atom, involved in chemical reactions and electrical conductivity.

Neutrons

Electrically neutral subatomic particles found in the nucleus of an atom, contributing to the atom's mass but not its charge.