Bundling is expected to provide greater profits when the two bundled goods are:
I. substitutes.
II. goods that have high fixed costs and low marginal costs.
III. very close complements.
A) I only
B) II only
C) II and III only
D) I, II, and III

Question

Quizplus · Accepted Answer

Bundling is more profitable when goods have high fixed costs and low marginal costs, as it allows firms to spread the fixed costs over more units. Additionally, bundling is effective with complements because it increases the perceived value of the package, encouraging consumers to purchase both items together.

Bundling Is Expected to Provide Greater Profits When the Two