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You are the manager of a firm that produces two products, X and Y. To simplify the computations, suppose the cost of production is zero for both products. You have estimated that there are three types of customers, I, II, and III, who buy the products of the firm. There are 2,000 customers of each type, and they differ in their willingness to pay for the products. Based on statistical information, you have estimated the following table:


Type of Customer Product X Product Y
I $100 $50
II $80 $130
III $30 $150


1. Calculate the profits of the firm if it charges $30 for product X and $50 for product Y.

2. Calculate the profits of the firm if it charges $100 for product X and $150 for product Y.

3. Calculate the profits of the firm if it charges $150 for a bundle containing one unit of product X and one unit of product Y.

4. Calculate the profits of the firm if it charges $210 for a bundle containing one unit of product X and one unit of product Y, and also offers the products separately at a price of $100 for product X and $150 for product Y.

Econometrics, Economics

  • Category:- Econometrics
  • Reference No.:- M9693975

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