Question
Superior Cable TV buys the right to provide an exclusive movie channel (HBOW) in its province.Superior pays $300,000 per year for HBOW and the marginal
Superior Cable TV buys the right to provide an exclusive movie channel (HBOW) in its province. Superior pays $300,000 per year for HBOW and the marginal cost of providing HBOW is zero. Superior's economist realizes they have two groups of customers: the 8,000 hardcore HBOW fans who will pay up to $300 a year for the exclusive network; and the 70,000 casual viewers who will pay up to $30 a year for HBOW.
If Superior Cable TV can price discriminate, what is its benefit?
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Microeconomics
Authors: Robert Pindyck, Daniel Rubinfeld
8th edition
978-0132870436, 132870436, 013285712X, 978-0133371178, 133371174, 978-0132857123
