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Bundling Benefits

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Bundling products that could be sold separately is a common thing to do in a competitive market. Anything from select television packages, which give you a variety of television shows, to subscribing for different radio stations to listen to in your car. In this technology age, producers fear they will be loosing consumers due to the fact that consumers are now able to choose what they want and need individually. Much of the attention in the economic analysis of bundling has been placed on how the correlation of values between products matters for the profitability of bundling. The government should not be putting caps on bundling, nor on cord cutting. In order to explain the economics of bundling, we will take a look at what bundling does …show more content…
Why pay for a bundle where you are saving money but at the same time spending money on some things you wont even use? That is why there is the al la Carte method of purchasing products for consumers. Consider the following, a consumer is offered a ten-dollar candy bar while staying at a hotel where he is already spending six hundred dollars. The price of the candy bar seems outrageous, but when adding the ten dollars to the six hundred dollars it creates a different perception as the consumer. Paying for the candy in an unbundled fashion, the consumer most likely will not pay it versus the same person who will already committed to paying the six hundred would not most likely not hesitate to spend six hundred and ten dollars. This is the logic that sits behind bundling. By paying for the bundle you are getting what you want and also what you don’t necessarily want. The consumer also has a choice to cord cut if they chose to do so. Cord cutting involves getting rid of paying for large bundles and going the route of al la Carte. Going with this route can easily cut a consumers bill in half. It really depends though what you as the consumer

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