Cruise Casino

You operate a Caribbean destination resort. You currently offer plans for a cruise departing from the resort and plans for a casino stay. It is expected that in 2021 there will be some return to more normal travel. You will re-launch your advertising for 2021 announcing that customers will be able to do both for one price. Your marginal cost per customer across both tours is $4800.

Customer1 $7,000 $3,000

Customer2 $2,000 $6,000

You knowthat33%of your customers will never bundle,21%of your customers decline cruises because of seasickness and12%decline the casino trip saying they don't believe in gambling.

Given the preferences distribution, will the mixed bundling increase profits?To support your answer,you must show your calculation of the net gain in profit,if any,with a mixed bundle strategy.

*******Since the cost, the customer is paying decreases with mixed bundling and the costs for the company to provide the service stay the same, wouldn't the profits decrease with mixed bundling?*******