Question
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
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.
"We Book Your Honeymoon Tour"
Cruise Casino
Customer 1 $7,000 $3,000
Customer 2 $2,000 $6,000
Given the preferences, would bundling improve profits over the high-cost strategy?Support your conclusion by showing if (by how) profits differ under each strategy.
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Principles of economics
Authors: N. Gregory Mankiw
6th Edition
978-0538453059, 9781435462120, 538453052, 1435462122, 978-0538453042
