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# Challenges at Time Warner

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## imanina amajida

on 6 May 2014

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#### Transcript of Challenges at Time Warner

Challenges at Time Warner
MEMO 1
1. Will lowering the price will yield higher revenues?
2. What is an estimate of the maximum monthly revenues we can achieve through this channel ?
MEMO 2
1. The company’s pricing strategy in order to maintain a market share of 65 percent in Kansas City

2. Planning an exit strategy if things turn for the worse by determining Time Warner’s lowest acceptable selling price for their bundled packages
MEMO 3
Formulate a plan that will permit us to profitably achieve this goal (within three years, a significant fraction of our digital cable subscribers will be equipped with HDTV sets and signed up for our new program tier devoted to HDTV programming).

MEMO 4
MEMO 5
MEMO 6
profit-maximizing price
monthly profit
Q = 1,9711 – 0,1075 p
finding out when demand is unitary elastic is
(b)* (P(a – bP)) = -1
(-0,1075)* P(1,9711-0,1075 P) = -1
Therefore P = \$ 9,17 and Q= 986
Maximum total revenue = \$ 9,041,62

finding the own price elasticity is
E Q,P = b * (P/Q)
= -0,1075*(10,5/0,852) = -1,325

FARIZ MUZAKKI

ASTRIDIANTI HANINDYANARI

DWI RIZKI SETYORINI