There are many industrial applications where attempts are made to sell ancillary products or services with a primary item. For instance, a warranty is often offered as an ancillary product to those who buy the television sets (the primary item). This has become even more important in the airline industry where ancillary products such as baggage fees have become very important to the financial health of the industry. In this paper, the question of what price to charge for the primary and ancillary products will be investigated. We also look at the optimal assignment of capacity, e.g., the size of an aircraft to assign to a particular route. It is demonstrated that the optimization of prices when demand functions are linear reduces to the solution of a system of linear equations and the optimization of one variable function.