Transcribed Image Text:Suppose that there are four consumers who value two goods: (1) monthly gym membership and (2)
monthly unlimited fitness classes in the following way:
Consumer
Value for Gym
$20
$80
$90
$120
1
2
3
4
Value for fitness classes
$120
$80
$60
$30
(a) What prices maximize the revenue for gym memberships and classes when not sold as part of a
bundle?
(b) What is the revenue maximizing price for a bundle of both A and B?
(c) Can you find a mixed bundle that increases revenue relative to the bundle in part (b)?
monthly unlimited fitness classes in the following way:
Consumer
Value for Gym
$20
$80
$90
$120
1
2
3
4
Value for fitness classes
$120
$80
$60
$30
(a) What prices maximize the revenue for gym memberships and classes when not sold as part of a
bundle?
(b) What is the revenue maximizing price for a bundle of both A and B?
(c) Can you find a mixed bundle that increases revenue relative to the bundle in part (b)?
