Question 9

Follow-up question(note that the dollar amounts have not changed from the previous scenario.)

You operateaCaribbeandestinationresort. You currently offer plans for a cruise departing from theresort 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.

Casino Cruise

Customer 1 $7,000 $3,000

Customer2 $2,000 $6,000

You know that about 21% of your customers decline cruises because of seasickness.At least 12% decline the casino trip saying they don't believe in gambling.As a rough approximation, you estimate that approximately 33% of your customers will never bundle.Given the preferences distribution, will mixed bundling increase profits?You must show the calculations that support your conclusion.

NOTE: Please do calculations with 21%, 12%, and 33%, and not 79%, 88%, and 67% (percentage of customers that will) because professor has graded as "incorrect". Thanks