Section D: Case Study Qriestions $-$ Answer any $2$ Questions selected from Questions VI$,$ VII and VIII. These will be worth $200$ Points Dach $-2200=400$ total Points for this section.

For all these Orestions assume you are working for the Time$-$Warner Meilia$/$Sntertainment roun$-$and are being asked to answer a Memo based question. These Memos are adapted from the Time$-$Warner Case Studies at the end of the Textbook Note: the numbers in parentheses are questions that must be answered in the course of your particular Case Study response.

VIII $-$ Profit Maximiration Case Study:

To: Pricing Manager, Midwest Region

From: Vice President, Marketing

Res Picing New Program Tiers

In response to increased requests for a la carte pricing, we at Time$-$Wamer have decided to start a tial ofiering of smaller program tiers. As the first step a sports package is being oifered, which includes NBA TV and the Soccer Channel.

The trial ofiering will be limited to our Region $2$ only. We estimate that our relevant incremental $($marginal$)$ costs for the sports package are $$2\mathrm{.}50$ per subscriber.

I am attaching regression results based on preliminary survey conducted by our marketing