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Price elasticity of demand for a number

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Using existing market research, we were able to calculate an estimated own-price elasticity of demand for a number of our most popular cable channels. Use this information, along with the marginal cost for each channel, to calculate the profit-maximizing price for each of these channels. (Subscription price is profit-maximizing price).

Channel              Programming Cost per                  Estimated Own Price                     Subscription Price

                               Subscriber per Month                   Elasticity of Demand

ESPN                    $6.15                                                    -1.8

TNT                       $1.52                                                    -2.1       

Disney Channel    $1.25                                                    -1.6

Fox News           $1.05                                                    -1.9

MSNBC'              $0.99                                                    -2.4

CNN                      $0.87                                                    -3.4

Reference no: EM132170447

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