Should time warner bundle or sell separately


Assignment:

Question

Time Warner could offer the History Channel (H) and Showtime (S) individually or as a bundle of both. Suppose the reservation prices of customers 1 and 2 (the highest prices they are willing to pay) are presented in the boxes below.

The cost to Time Warner is $1 per customer for licensing fees.

Preference

                 Showtime  History Chanel

Customer 1       9            2

Customer 2       3            8

Should Time Warner bundle or sell separately? Your answer needs to include the unbundled and bundled profits.

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Microeconomics: Should time warner bundle or sell separately
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