Practice of Bundling Golf Option with Luxury Option

Solution Preview

OPTIMAL BUNDLING STRATEGY FOR GOLF, LUXURY AND FAMILY OPTIONS
What happens if the seller aggregates the two goods and sells them as a bundle? Some consumers -those who valued both goods at one dollar- will be willing to pay two dollars for the bundle, while others -those who valued both goods at almost zero- would not be willing to pay even a penny. The total area under the demand curve for the bundle, and hence the total potential surplus, is exactly equal to the sum of the areas under the separate demand curves. However, most interestingly, bundling changes the shape of the demand curve, making it flatter (more elastic) in the neighborhood of one dollar and steeper (less elastic) near either extreme, as shown in the plots of reservation prices for golf and luxury goods. As more goods are added, this effect becomes more pronounced.
A profit-maximizing firm selling a bundle of 2 goods luxury and golf will set the price slightly below the mean value of the bundle of $250 each that is little less than $500, and almost all consumers will find it worthwhile to purchase the bundle. In contrast, only half the consumers would have purchased the goods if they had been individually sold at the profit-maximizing price $250(there is insufficient data to determine the individual profit maximizing price), so selling the goods as a bundle leads to a smaller deadweight loss and greater economic efficiency. This is the theory, in practice what I did was that I added the luxury and golf column in the spread sheet and pasted it in column E, then I added the data for the 100 items and divided it by 100, ...