Superior Cable TV buys the right to provide an exclusive movie channel (HBOW) in its province. Superior pays $300,000 per year for HBOW and the marginal cost of providing HBOW is zero. Superior's economist realizes they have two groups of customers: the 8,000 hardcore HBOW fans who will pay up to $300 a year for the exclusive network; and the 70,000 casual viewers who will pay up to $30 a year for HBOW.

If Superior Cable TV can price discriminate, what is its benefit?

Answer rating: 100% (QA)

If Superior Cable TV can price discriminate it can charge different prices to different customer gro... View the full answer