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 SportsFilmsBundled price €15 €18 €25 €10 €30 Alfa Beta €20 €30 €20 €25 Omega (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?

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 SportsFilmsBundled price €15 €18 €25 €10 €30 Alfa Beta €20 €30 €20 €25 Omega (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?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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