Question: A firm that sells word processing and spreadsheet programs has four potential customers with the following reservation prices: The firm's cost of production is zero,

A firm that sells word processing and spreadsheet programs has four potential customers with the following reservation prices:

Word Processor Spreadsheet Bundle Aaron $120 $30 $150 Brigitte $110 $90 $200

The firm's cost of production is zero, so maximizing its profit is equivalent to maximizing its revenue. To maximize its profit, should the firm charge separate prices for each product, engage in pure bundling, or use mixed bundling?

Word Processor Spreadsheet Bundle Aaron $120 $30 $150 Brigitte $110 $90 $200 Charles $90 $110 $200 Dorothy $30 $120 $150

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