The Optimal Strategy for Gustavo's Furniture Store

What is the optimal strategy for Gustavo's Furniture Store?

Should the store offer kitchen and living room furniture individually or as part of a complete furniture package including the bedroom furniture?

The optimal way for Gustavo's Furniture Store is to offer them only as a complete furniture package, including the bedroom furniture.

It is more optimal for Gustavo's Furniture Store to offer the kitchen and living room furniture as part of a complete furniture package, including the bedroom furniture. This strategy will result in the highest revenue for the store.

In this situation, the optimal strategy for Gustavo's Furniture Store is to offer the kitchen and living room furniture as part of a complete furniture package, including the bedroom furniture. By offering the furniture as a package, the store will attract all three types of buyers who are willing to spend $1,000 on their bedroom furniture.

If the store were to offer the kitchen and living room furniture individually, Type A and Type C buyers would not purchase the complete package due to their budget constraints. This would result in the store making $900 for each Type A, Type B, and Type C buyer, totaling $2,700 in revenue.

On the other hand, by offering the kitchen and living room furniture as part of a complete furniture package, all types of buyers would purchase it since they are all willing to spend $1,000 on the bedroom furniture. This would result in the store making $1,000 from each Type A, Type B, and Type C buyer, totaling $3,000 in revenue.

Therefore, offering the kitchen and living room furniture as part of a complete furniture package is the more optimal strategy for Gustavo's Furniture Store, as it maximizes revenue by catering to all types of buyers while ensuring each buyer purchases the complete package.