A cable company has two services, the Basic Service and the Movie Channel. The demands for the two services are completely unrelated for each and every consumer. Each buyer is characterized by a pair of reservation prices as shown in the following table: Basic Service (TL) Movie Channel (TL) 5 15 11 9 14 6 4 0 17 The marginal cost of each service is 3 TL. Assume there are equal number of consumers in each category. a) If the services are sold separately, what price should the cable operator set for each service? b) Suppose that the operator decides to pursue a mixed bundling strategy. What price should be set for the bundled service? What price should be set for each service if purchased individually? Students Families Hotels Schools Young Adults Pensioners 16 17 0 c) Assume that a new firm enters the market and provides only the Basic Service. The marginal cost of the new firm is 3 TL. Can the incumbent cable operator apply the mixed bundling strategy? (Assume price setting behavior.)