Intermediate Microeconomic

Suppose that Comcast is trying to decide how to price two channels (NESN, WGBH) which it wishes to sell to four consumers (Charlie, Deval, Mitt, and Paul), whose willingness to pay for each channel are listed below. Comcast incurs a marginal cost of $1 for selling an additional channel to a consumer.

               NESN    WGBH

  Charlie     16           4

  Deval      10            15

  Mitt          14           9

  Paul         3            18

(a) Suppose Comcast sells each channel individually. What are the optimal prices who purchases which channel?

(b) Suppose Comcast sells the channels only as bundle. What is the optimal bundle price and who purchases it?

(c) Suppose Comcast engages in a mixed bundling strategy. What is the optimal prices and who purchases what?