Assume a cable TV supplier. The following table shows the maximum price Alfa, Beta and Omega will pay for two separate TV-types (sports, films) and the bundled (sports + films) price: Assume the MC of sports is €10 and the marginal cost of films is €5. Maximum price Sports Films Bundled price Alfa €15 €20 €30 Beta €18 €20 €25 Omega €25 €10 €30 (i) Assume the TV supplier engages in mixed bundling and charges €29.5 for the bundle, €24 for sports and €19 for films. What is the best pricing strategy for the TV-supplier, simple bundle, separate prices only, or mixed bundling? Show your calculations! (ii) Can you find better prices for the TV supplier?

Advanced Engineering Mathematics
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ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
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Assume a cable TV supplier. The following table shows the maximum
price Alfa, Beta and Omega will pay for two separate TV-types
(sports, films) and the bundled (sports + films) price: Assume the MC
of sports is €10 and the marginal cost of films is €5.
Maximum price
Sports
Films
Bundled price
Alfa
€15
€20
€30
Beta
€18
€20
€25
Omega
€25
€10
€30
(i) Assume the TV supplier engages in mixed bundling and charges
€29.5 for the bundle, €24 for sports and €19 for films. What is the
best pricing strategy for the TV-supplier, simple bundle, separate
prices only, or mixed bundling? Show your calculations!
(ii) Can you find better prices for the TV supplier?
Transcribed Image Text:Assume a cable TV supplier. The following table shows the maximum price Alfa, Beta and Omega will pay for two separate TV-types (sports, films) and the bundled (sports + films) price: Assume the MC of sports is €10 and the marginal cost of films is €5. Maximum price Sports Films Bundled price Alfa €15 €20 €30 Beta €18 €20 €25 Omega €25 €10 €30 (i) Assume the TV supplier engages in mixed bundling and charges €29.5 for the bundle, €24 for sports and €19 for films. What is the best pricing strategy for the TV-supplier, simple bundle, separate prices only, or mixed bundling? Show your calculations! (ii) Can you find better prices for the TV supplier?
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