A cable company offers two basic packages: sports and kids package and a combined package. There are three different types of users: parents, sports fans and generalists. The following table shows the maximum price that each type of consumer is willing to pay for each package.
|
Type of Users
|
Sports Package
|
Kids Package
|
|
Parents
|
$10
|
$50
|
|
Sports Fans
|
$50
|
$10
|
|
Generalists
|
$40
|
$40
|
1. If the cable company offers any one package for $50 or the combined package for $70, who will buy each package? Explain your reasoning.
2. Explain why the company will make a higher profit with this method than if the bundled package option were not offered.