Mixed Bundling Is Sometimes the Most Profitable Strategy for a Firm

question 49

Multiple Choice

Mixed bundling is sometimes the most profitable strategy for a firm:

• A)because the firm can more accurately assess the reservation price of each consumer.
• B)because consumers prefer to spend in binges and make multiple purchases at the same time.
• C)when the firm has high delivery or shipping costs.
• D)because this strategy discourages a customer from buying a component when his/her willingness to pay is less than the marginal cost of a component of the purchase.

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Definitions:

Psychosexual Stage

A concept in Freudian psychoanalytic theory referring to the series of five stages in childhood development, each characterized by the pleasure focus on a different part of the body.

Freud

Sigmund Freud was an Austrian neurologist known for founding psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Anally Fixated

a term from Freudian psychology referring to a stage of psychosexual development where there's a strong focus on activities related to the anus, such as retention or expulsion of feces, which can influence personality traits.

Anal Stage

The second stage in Freud’s psychosexual stages, occurring from about 18–36 months of age, in which the anus is the erogenous zone and toilet training is the source of conflict.