Imagine the opposite. For simplicity assume that A is the one the captives do not buy. It should be clear that the shoppers will not buy any good that captive do not buy so the retailer will not sell A at all. But one can always lower the price of A to such level that it is still above the marginal cost and the captives buy both goods, a strategy that increases prot. In terms of Figure 1 B is the only good sold if the price point is in region B. For any point in this region the retailer can x the price of.
