Negligible Marginal Cost Assume the marginal cost of filling a seat at a theatre is negligible Sitting one more patron does not require further staff or further work from the performers Once a theater is built, the number of seats is set and sitting one more customer is virtually costless as long as the performance is not sold-out Perhaps the only marginal costs faced by the theater are those associated with wear-and-tear on the facility or washroom usage, both of which should be minimal The condition can easily be relaxed and marginal costs can be included in the model, but as a first order foray into bundling, we strive to keep it simple