Question
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
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.
Customer Preferences
Cruise Casino
Customer1 $7000 $3000
Customer2 $2000 $6,000
Given the preferences, would bundling improve profits over the high-cost strategy?Support your conclusion by showing if (by how much) profits differ under each strategy, bundle versushigh price.
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