Bundling raises higher revenues than selling the goods separately when:

A. demands for two products are mildly positively correlated.

B. there is a perfect positive correlation between the demands for two goods.

Question

Business

Catalina

17 April, 14:16

Bundling raises higher revenues than selling the goods separately when:

A. demands for two products are mildly positively correlated.

B. there is a perfect positive correlation between the demands for two goods.

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Answers (1)

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Lillian Koch · Answer 1

B. there is a perfect positive correlation between the demands for two goods.

Explanation:

Bundling is a technique of combining two or more products and selling them together as one package.

This technique is most commonly used by many companies like Microsoft, McDonald's, etc.

Sometimes, the strategy of bundling doesn't pay off in some endeavours as the companies might not make profit or not make as much profit as was originally projected.

Other times, it has paid off handsomely.

À company can decide to bundle products like a mouse, a keyboard, a USB drive and a monitor to sell as one package and not sell them individually, this is known as "pure bundling".

There is an increase in revenue when the change in value of one of the product in the bundle is equally proportional to the change in value of the other product in the bundle.

Bundling raises higher revenues than selling the goods separately when:A. demands for two products are mildly positively correlated.B. there is a perfect positive correlation between the demands for two goods.

Bundling raises higher revenues than selling the goods separately when:

A. demands for two products are mildly positively correlated.

B. there is a perfect positive correlation between the demands for two goods.