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You are a movie distributor with two movies to offer: an arts film called Sorrow and Loneliness and an action film called Death Machine. You dis- tribute to three theaters: "Supermall Megaplex", "Downtown Deluxe", and "Ethereal Visions" You know that the amounts each theater would pay for these movies are as shown in Table below: Valuation Theater Sorrow Death Supermall $60 $100 Downtown $90 $60 Ethereal $120 $10 a. Suppose that you do not bundle. What is the optimal price of Sorrow and what is the optimal price of Death? What is your total revenue? b. Now suppose that you offer the two movies only as a bundle (pure bundling). What is the optimal price for the bundle? What is your revenue? c. Suppose you can engage in mixed bundling. What is your optimal pricing strategy? What does each theater buy? What is your revenue? You are a movie distributor with two movies to offer: an arts film called Sorrow and Loneliness and an action film called Death Machine. You dis- tribute to three theaters: "Supermall Megaplex", "Downtown Deluxe", and "Ethereal Visions" You know that the amounts each theater would pay for these movies are as shown in Table below: Valuation Theater Sorrow Death Supermall $60 $100 Downtown $90 $60 Ethereal $120 $10 a. Suppose that you do not bundle. What is the optimal price of Sorrow and what is the optimal price of Death? What is your total revenue? b. Now suppose that you offer the two movies only as a bundle (pure bundling). What is the optimal price for the bundle? What is your revenue? c. Suppose you can engage in mixed bundling. What is your optimal pricing strategy? What does each theater buy? What is your revenue?
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a The optimal price of Sorrow is 90 and the optimal price of Death is 60 The total rev... View the full answer
Related Book For
Business Law The Ethical Global and E-Commerce Environment
ISBN: 978-0071317658
15th edition
Authors: Jane Mallor, James Barnes, Thomas Bowers, Arlen Langvardt
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