Question

Kim’s Beauty Salon sells shampoo and conditioner to two types of consumers. The following table shows...

Kim’s Beauty Salon sells shampoo and conditioner to two types of consumers. The following table shows the number of consumers of each type and their reservation prices for the two products.

Reservation Prices

Customer Type Number Shampoo Conditioner
Type 1 30 10 5
Type 2 20 7 9

At what price does Kim Maximize Shampoo profit by pricing individually?

At what price does Kim Maximize conditioner profit by pricing individually?

What is the maximum profitability for the bundle of shampoo and conditioner?

Answer 3

Does bundling increase or decrease profit?

By what amount does bundling increase or decrease profit (List value only)

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