Scenario 17-6 Assume That a Local Telecommunications Company Sells High Speed Internet

question 343

Short Answer

Scenario 17-6
Assume that a local telecommunications company sells high speed internet access and cable television. The company's only two customers are Taylor and Tim. Taylor is willing to pay $50 per month for high speed internet access and $50 per month for cable television. Tim is willing to pay only $20 per month for high speed internet access, but is willing to pay $70 per month for cable television. Assume that the telecommunications company can provide each of these products at zero marginal cost.
-Refer to Scenario 17-6. How much additional profit can the telecommunications company earn by switching to the use of a tying strategy to price high speed internet access and cable television rather than pricing these goods separately?

---

Definitions:

Criticizing Employers

The act of expressing disapproval or finding faults with one's employers or workplace, potentially pointing out areas needing improvement or expressing discontentment.

Hired

Employed or engaged the services of an individual or entity for a specific job or task in exchange for compensation.

Tactful

Showing sensitivity and thoughtfulness in dealing with others, especially in difficult situations.

Mailing

The process of sending letters and packages through the postal service.