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QUESTION

There are six consumers A, B, C, D, E and F who potentially buy two goods1 and 2from a monopolist who incurs a production cost of $3 for each of...

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(a) What are the optimal prices under a la carte pricing?

(b) What is the optimal price under pure bundling?

(c) Calculate Total Consumer Surplus in each of (a) and (b).

(d) Between (a) and (b) which creates the highest total surplus?

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