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Explain why the company will make a higher profit

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A cable company offers two basic packages: sports and kids, and a combined package. there are three different types of users: parents, sports fans, and generalists. The following table show the maximum price that each type of consumer is willing to pay for each package.

Sports Package Kids Package
Parents 10 50
Sports Fans 50 10
Generalists 40 40

a. If the cable company offers any one package for $50 or the combined bundled package for $70, who will buy each package?

b. Explain why the company will make a higher profit with this method than if the bundled package option were not offered.

Reference no: EM131017436

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