You are selling two goods, 1 and 2 to a market consisting of three consumers with reservation prices as follows: the unit cost of the product is $40. a. compute the optimal prices and profits for (i) selling the goods separately, (ii) selling as a pure bundle, and (iii) and selling separately as well as a bundle (that is using the strategy of mixed bundling). which strategy yields the highest profits? b. which strategy would be the most profitable if the unit cost of production is $5?

Brian has just finished college. he wants to set up a small business to make and sell fireworks. he registers his company and acquires a license from the government. he finds that most of his competitors are selling fireworks at an extremely low price. he would like to make more money, so he decides to innovate and develop better fireworks. he sells his fireworks at a higher price, and they are a huge hit with the customers. after a few years, he earns enough profit to set up a bigger fireworks factory that complies with the government’s health and safety regulations. he even starts exporting fireworks overseas. which type of economy does this scenario describe?