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Bundling to maximize profits

BUNDLING AT THE SYMPHONY

Value of Piece
Type of Patron
"Old Favorite" "Avant Garde"
Conservatives
(70% of Market Potential)
$3.00 $1.00
Progressives
(30% of Market Potential) $2.00 $5.00

Total Market = 1000 Patrons (700 Conservative and 300 Progressive)

A concert consists of three pieces and each season consists of a number of concerts.

(a) How can this orchestra organize a concert as a combination of conservative Avant Garde pieces so as to maximize profits? Assume that costs are the same for all mixes.

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The solution examines bundling to maximize profits for a conservation.

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