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2. Is this direct or indirect price discrimination? Explain. 3. Why would McDonald choose to create...

2. Is this direct or indirect price discrimination? Explain. 3. Why would McDonald choose to create bundles? How would they go about designing effective bundles?

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Answer #1

Question 2 is incomplete as the case is not mentioned here.

Answer 3:

The McDonald would choose to create bundles to sell more of their product and increase their profits by bundling of their product. This is referred to as second degree price discrimination where bundling is done to increase the overall level of profits of the producer. To design effective bundles, it needs to study the consumer preferences in detail and the goods which are in great demand and bundle them together by providing a discount which increases as the number of products purchased increases.

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