Consumers demand different features from cough medications taken for daytime use versus nighttime use.Drug companies conveniently package both medications together.This strategy is designed to
A)Allow consumers to buy the two together
B)Stop consumers from buying each medicine separately
C)Make the consumers more homogenous so that maximum consumer surplus can be extracted with a single price
D)None of the above

Question

​Consumers demand different features from cough medications taken for daytime use versus nighttime use.Drug companies conveniently package both medications together.This strategy is designed to
A)​Allow consumers to buy the two together
B)Stop consumers from buying each medicine separately
C)Make the consumers more homogenous so that maximum consumer surplus can be extracted with a single price
D)​None of the above

Quizplus · Accepted Answer

By packaging both medications together, drug companies can use a single price to extract maximum consumer surplus from the market. This strategy assumes that consumers value both medications equally and are willing to pay the same price for both, even though they have different features and uses. It also eliminates the option for consumers to buy only the medication they need, which could lead to a loss of sales for the drug company.

​Consumers Demand Different Features from Cough Medications Taken for Daytime

Consumers Demand Different Features from Cough Medications Taken for Daytime