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    Bundle and Mixed pricing

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    Soma cable has a educational channel and a music video channel. The viewing audience consists of two segments (A and B). Below shows the segment sizes, their RP's for each channel:

    A's RP: Educational: $20 Music Video: $2 Segment Size: 4,000
    B's RP: Educational: $11 Music Video: $11 Segment Size: 6,000

    SOMA incurs a cost of $5 per channel for each customer.

    SHOW ALL EXCEL FORMULAS

    1) If it sold each channel separately, what price should it set on each to maximize profits?

    2) If it sold the two channels as a bundle, what price should it set on the bundle to maximize profit?

    3) Could Soma generate more profit through mixed bundling? If so, which ones and at what price?

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    https://brainmass.com/economics/cost-benefit-analysis/bundle-mixed-pricing-605868

    Solution Preview

    Soma cable has a educational channel and a music video channel. The viewing audience consists of two segments (A and B). Below shows the segment sizes, their RP's for each channel:
    A's RP: Educational: $20 Music Video: $2 Segment Size: 4,000
    B's RP: Educational: $11 Music Video: $11 Segment Size: 6,000
    SOMA incurs a cost of $5 per channel for each customer.

    1) If it sold each channel separately, what price should it set on each to maximize profits?
    Let us take case of Educational channel first
    Price, P No. of customers Total Cost Total ...

    Solution Summary

    The solution depicts the steps to determine the best pricing strategy in the given case.

    $2.19