Which of the following scenarios best illustrates bundling?

• A. A customer buys a movie ticket and popcorn separately at their regular prices.
• B. A store gives a discount on popcorn if you show your movie ticket.
• C. A movie theater increases the price of popcorn during peak hours.
• D. A movie theater offers a ticket and a popcorn together at a single price lower than buying each separately.

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the concept of bundling in microeconomics. Bundling occurs when a seller offers two or more products or services together as a single combined package, often at a price lower than the sum of buying each item separately.
2. Step 2: Analyze each scenario to see if it involves selling products together as a package or separately. For example, buying a movie ticket and popcorn separately at regular prices is not bundling because the products are sold independently.
3. Step 3: Identify if any scenario offers a discount or incentive related to purchasing one product with proof of buying another (like a discount on popcorn if you show your movie ticket). This is a form of price discrimination or promotion, but not bundling since the products are still sold separately.
4. Step 4: Consider if any scenario involves changing prices based on timing (like increasing popcorn prices during peak hours). This is dynamic pricing, not bundling.
5. Step 5: Recognize that the scenario where the movie theater offers a ticket and popcorn together at a single price lower than buying each separately perfectly fits the definition of bundling, as it combines products into one package at a discounted total price.