Question

In: Economics

You manage a cable company that offers 2 channels - NBC and Fox. You face 2...

You manage a cable company that offers 2 channels - NBC and Fox. You face 2 types of customers (type A and type B) and there are 100 customers of each type. Their respective values for each channel are:

Type A Type B
NBC $10 $15
Fox $3 $7

Suppose that you sell each channel separately. You should set a price of $_____ for NBC and a price of $______ for Fox.

Solutions

Expert Solution

For type B NCB price $15 should be set which gives revenue of 750 .

For type A Fox price $3 which gives revenue 150 .

Total revenue = 900 which is maximum .

So NCB price = $15

Fox price = $3

Rahul Sunny answered 2 years ago
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