You own the rights to two movies, Casablanca and Godzilla. Your accounting cost for these movies are $ 900 for Casablanca and $500 for Godzilla. You are planning on selling the rights to show the movies to two TV stations, Station A and Station B. You could them or selling them separately. You know that Station A serves mostly mature adults viewers and values Casablanca and Godzilla as follows (see table below). Station B serves mostly young adults and their willingness to pay for both movies is also revealed below. Assume your pricing schemes are meant to meet your competition or are cost-justified (i.e. does not violate the Robinson-Patman Act).

If arbitrage is NOT possible, what is the best way to sell these movies? Do you sell them as a bundle or single? Why? What profit would you make if you bundle it or sold it as singles? Show your work.

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