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Would bundling improve profits over the high-price strategy

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Reference no: EM132951176

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

Customer 1                    $7,000              $3,000

Customer 2                     $2,000                  $6,000

Problem 1: Given the preferences, would bundling improve profits over the high-price strategy? Support your conclusion by showing if (by how much) profits differ under each strategy, bundle versus high price.

Reference no: EM132951176

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