Question 3: Bundling (8 points) Consider a telecommunication rm that offers both phone service and a high-speed internet service. It has two types of consumers who differ in their willingness to pay a monthly rental fee for either service: urr- _I- Where :1: > 0. There is a mass N of consumers. Half of these consumers are chatters, and the other half are hackers. The rm is not able to price discriminate. Costs are normalized to zero. (a) (2 points) Compute the rm's prot under separate pricing (= unbundling) as a flmction of m. (b) (2 points) Compute the rm's prot under pure bundling as a function of 2:. Pure bundling means that the rm is only selling the two services as a package. (c) (4 points) For what values of a: is pure bundling more protable than separate pricing? Is bundling here welfare improving? Explain