Refer to Figure 14-4. When price falls from P3 to P1, which of the following does the firm find? It should produce Q1 units of output. It should produce Q3 units of output. Fixed cost is higher at a production level of Q1 than it is at Q3. It is unwilling to produce any output.

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Product and Price Bundling

Product and price bundling is used as a marketing strategy by businesses, where complementary products and services are combined and sold as a package deal. This bundled price is usually less than the total price of the individual products if they were to be sold separately. When bundled and sold, each product is sold at a reduced price. Using a price bundling strategy helps increase the average revenue per user and also increases the engagement with the user. This happens as the perceived value of the bundled products is more than the individual products.