A company sells two products, Product A and Product B. Assume that the variable costs for each product are $7. In a particular market, men and women value the two products as follows:
A company sells two products, Product A and Product B. Assume that the variable costs for each product are $7. In a particular market, men and women value the two products as follows:
| Value to the Customer | ||
| Product A | Product B | |
| Men (50 % of market) | $ 12 | $ 15 |
| Women (50 % of market) | $ 14 | $ 11 |
- If management is considering offering a bundle containing both products, what is the maximum price that could be charged for this bundle? Justify your answer.
- If the company’s goal is to maximize profits, should these products be offered only bundled together, offered only separately, or offered both bundled together and separately? Justify your answer.
In: Economics


