ABC Publishing sells an economics textbook and a study guide, both with zero marginal cost. Raheel values the text at Rs75 and the guide at Rs15; Mariam values the text at Rs60 and the guide at Rs25. If ABC ties (bundles) the two products, what combined price should it charge?
Correct answer D. Rs 85
Explanation
Raheel values the bundle at Rs90 and Mariam at Rs85; a price of Rs85 sells to both and earns Rs170, more than the Rs90 earned by selling only to Raheel.
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