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Explain the distribution of the preferences

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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

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 distribution of the preferences, will the mixed bundling increase profits? You must show the calculations that support your conclusion.

Reference no: EM133066594

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