Question

An opera house is offering three performances, and has two types of consumers. The performances are "Carmen," "Madama Butterfly," and "Eugene Onegin." Consumer 1 has WTP of $100 for a ticket to "Carmen," $200 for "Madama Butterfly," and $70 for "Eugene Onegin." Consumer 2 has WTP of $120 for "Carmen," $100 for "Madama Butterfly," and $150 for "Eugene Onegin." Each ticket costs the opera house $40. How should the opera house bundle the goods?

1) Bundle the three operas together.

2) Bundle "Madama Butterfly" and "Eugene Onegin," and sell "Carmen" separately.

3) Bundle "Carmen" and "Eugene Onegin," and sell "Madama Butterfly" separately.

4) Sell each opera separately.

Answer 1

1) Bundle the three operas together.

Step-by-step explanation:

In this question, we have to compute the total WTP of consumer 1 and consumer 2

Total WTP of consumer 1 = Ticket to Carmen + Ticket to Madama Butterfly + Ticket to Eugene Onegin

= $100 + $200 + $70

= $370

Total WTP of consumer 2 = Ticket to Carmen + Ticket to Madama Butterfly + Ticket to Eugene Onegin

= $120 + $100 + $150

= $370

Since in both the answer remains same. So, we consider the three operates together