Big C cable is a monopoly that can offer cable packages with different number of channels at different monthly fees. The marginal cost of providing an additional TV channel is c = 0. Let p be the customer's willingness to pay (in cents per month) for an additional TV channel when he already has q channels. There are two types of customers: high types whose demand for channels is given by PH = 120 - 9H and low types whose demand for channels is given by PL = 60 - qL a) Suppose all the high type customers live in Yuppieville and all the low type customers live in Sticksfield. What number of channels and at what monthly fee will Big C offer in each of these two areas? b) Alternatively, assume that high types and low types live in the same area, and Big C cannot tell its customers apart. Now it has to design a Basic package with 60 channels targeted at low types and a Premium package with 120 channels targeted at high types. If Big C wants to sell to both types, what is the profit-maximizing price for the Basic and Premium packages? c) If 20% of Big C's customers are high types and 80% are low types, will Big C benefit from including just 40 (instead of 60) channels in its Basic Package? (Credit given for explicit calculation of new prices for Basic and Premium packages) d) Rate the packages in a), b) and c) in terms of their effects on social welfare. Explain. muu