Marge's Beauty Salon sells shampoo and conditioner. Marge has two types of customers. Their willingness-to-pay for shampoo and conditioner are given in the table below
If Marge bundles the shampoo and conditioner, could she increase revenue? Shampoo Conditioner Type I 8 5 Type II 6 8
If Marge bundles the products together and sells the bundle for $13, each of her customers will be willing to buy the bundle. Without bundling, Marge would need to sell the shampoo for $6 and the conditioner for $5 in order to sell each customer both items. Thus, revenue from both items is $11 for each customer. Bundling increases Marge's revenues by $2 per customer.
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