Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder

Exercise 4

Suppose that the Acme manufacturing company has a monopoly position in the market for the two principal types of roadrunner-catching equipment: roller skates and jet-assist backpacks. Describe in general terms how Acme should price both of these products when it knows that the demands for the two goods are related and that the costs of producing the two goods exhibit economies of scope (see Chapter 8).