Microsoft packages are sold together for a single price. This is attractive for information goods since the marginal cost of adding an additional good to...

      

Microsoft packages are sold together for a single price. This is attractive for information goods since the marginal cost of adding an additional good to a bundle is negligible. Explain the economic effects of such behaviour.

  

Answers


Faith
Bundling enables reduction of the dispersion of willingness to pay by customers. This is in itself a form of price discrimination
Bundling also increases the barriers to entry of new firms into the market hence the firms already in the market retain their high profit margins.
Faimus answered the question on February 3, 2018 at 13:11


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