Bundling and High-Cost Strategy
Notes for Writer: Hello can you conclude how you came up with the customer preferences mathematically and also in words. Thank you. Please use Microsoft word.
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 is $4800.
Customer Preferences:
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 much) profits differ under each strategy, bundle versus high price.
Course Title
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Customer Preferences
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 is $4800.
Customer Preferences:
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 much) profits differ under each strategy, bundle versus high price.
From the provided data, the Marginal Cost (MC) p...
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