Suppose There Are Two Types of Cable TV Viewers

question 172

Multiple Choice

Suppose there are two types of cable TV viewers. The first type places a high value on sports channels (e.g., ESPN, Fox Sports, and The Golf Channel) and a low value on all other channels. The second type places a high value on music channels (VH1, MTV3, and CMT) and a low value on all other channels. In this case, we would expect cable operators to:

• A) sell sports and music channels in one bundle to both types of viewers.
• B) sell only sports channels to the first type of viewers and sell only music channels to the second type of viewers.
• C) use "à la carte" pricing.
• D) use fixed-cost pricing.

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