You manage a cable company that offers 2 channels - NBC and Fox. You face 2 types of customers (type A and type B) and there are 100 customers of each type. Their respective values for each channel are: Type A Type B
NBC $10 $15
Fox $3 $7

Suppose that you sell each channel separately. You should set a price of $ for NBC and a price of $ for Fox.

You should set a price of $___15 for NBC and a price of $___7___ for Fox.

Explanation:

a) Data and Calculations:

Customer           Type A      Type B  Maximum Price

NBC                       $10           $15            $15

Fox                         $3             $7              $7

Combined value  $13           $22

b) The cost of each channel would have enabled a better decision outcome to be reached.  However, it is better to set the maximum prices since individual values can change based on the forces of demand and supply.

answer; vertical marketing system;

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