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ABC Publishing offers an economics textbook along with a study guide. Raheel values the textbook at Rs 75 and the study guide at Rs 15. Mariam values the textbook at Rs 60 and the study guide at Rs 25. Assuming the marginal cost of producing both items is zero, what is the optimal bundled price ABC Publishing should set if it decides to sell the two products together?

Oligopoly MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Select an option below, then read the explanation.

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Subject
Oligopolyeconomics-mcqs › oligopoly
Published
30 May 2019
Last updated
28 May 2026

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Explanation

Since the marginal cost of producing the textbook and study guide is zero, the publisher can maximize revenue by bundling the products. Raheel's total willingness to pay is Rs 75 + Rs 15 = Rs 90, and Mariam's total is Rs 60 + Rs 25 = Rs 85. Setting the bundle price at Rs 85 allows both customers to purchase the bundle, maximizing sales and profits.

More Oligopoly MCQs

Practice related questions from the same subject.

  1. 1.Which concept in game theory is commonly used to analyze oligopoly behavior?
  2. 2.ABC Publishing offers an economics textbook along with a study guide. Raheel values the textbook at Rs 75 and the study guide at Rs 15, while Mariam values the textbook at Rs 60 and the study guide at Rs 25. Assuming the marginal cost of producing both items is zero, what combined price should ABC Publishing set when pricing the textbook and study guide separately to maximize revenue?
  3. 3.What do many economists believe is the valid reason behind resale price maintenance?
  4. 4.What happens to the market price as the number of sellers in an oligopoly grows?
  5. 5.When an oligopolist independently determines its production quantity to maximize profits, how does its output compare to that of a monopoly and a perfectly competitive market?
  6. 6.If an oligopolist aims to maximize profits and finds that the output effect on the marginal unit is greater than the price effect, what action should the firm take?
  7. 7.What do we call a market structure where numerous companies offer products that are close substitutes but not exactly the same?
  8. 8.What is the primary characteristic of a cartel?
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