Based on Schrage (1997). The file P08_05.xlsx lists the size of the four main markets for Excel, Word, and the bundle of Excel and Word. (We assume that Microsoft is willing to sell Excel or Word separately, and it is willing to sell a package with Excel and Word only.) It also shows how much members of each group are willing to pay for each product combination. How can Microsoft maximize the revenue earned from these products? You should consider the following options:

• No bundling, where Word and Excel are sold separately
• Pure bundling, where purchasers can buy only Word and Excel together
• Mixed bundling, where purchasers can buy Word or Excel separately, or they can buy them as a bundle