ABC Publishing offers an economics textbook along with a study guide. Raheel values the textbook at Rs 75 and the study guide at Rs 15, while Mariam values the textbook at Rs 60 and the study guide at Rs 25. Assuming the marginal cost of producing both items is zero, what combined price should ABC Publishing set when pricing the textbook and study guide separately to maximize revenue?

Explanation

Since the marginal cost of production is zero, ABC Publishing should set prices based on the maximum willingness to pay. Raheel's total willingness to pay is Rs 90 (75 + 15), and Mariam's total is Rs 85 (60 + 25). To maximize revenue when charging separately, the publisher should choose a combined price that both customers can afford. Setting the total price at Rs 75 ensures both customers can purchase, maximizing sales and revenue.