Question 9 -

Please see attached.

Question 9: You help couples book their perfect honeymoon. You currently offer plans for a cruise and for a casino stay. Your sales manager is getting her MBA and has suggested you might consider bundling as a way to boost profits. The table below shows the customer preferences. Your costs are $100 for the first booking and $50 for each additional booking. 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