Carmen Bianca BAKKER
xameerBundling works best when two conditions are met: high #variance in demand and zero #marginalcost. The first makes the product difficult to price on a stand-alone basis; the second ensures it’s never sold at less than cost.
I’ve also learnt the word I would have needed to type into DuckDuckGo to learn about the economics involved: #MarginalCost. It’s jargon related to economies of scale, that when translated to transportation means loosely the following: the increase in total cost [of a mode of transportation] by increasing the [journeys taken] by one. I could rephrase the definitions in terms of marginal cost, but I’m afraid to get it wrong, so I’m not going to.
Bundling works best when two conditions are met: high #variance in demand and zero #marginalcost. The first makes the product difficult to price on a stand-alone basis; the second ensures it’s never sold at less than cost.