The probabilities in (a) are based on previous newcomers to the business. According to the marketing...

 

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The probabilities in (a) are based on previous newcomers to the business. According to the marketing department, if Trojan Cruise Ships is willing to invest $4,500 on advertising their "game changing ideas, then these probabilities will change according to the following table. Démand High 0.6 Probability for Mexico Probability for Vancouver 0.6 Medium 0.3 0.4 Low 0.1 0 b) (2 points) Should Diego invest in advertising if the Mexico cruise is purchased? Explain. c) (2 points) Should Diego invest in advertising if the Canada cruise is purchased? Explain. d) (3 points) What overall strategy would you recommend to Diego? Be sure to justify your complete strategy. (Note: If calculations were shown in previous responses, you do not need to re-show work; only show new work or comparisons here.). e) (4 points) Trojan Cruise Ships decides to name the voyage that you have determined above as Trojan Adventure. For the rest of this problem assume that Trojan Adventure performs as a monopoly in that market (you can ignore all previous data about Trojan Cruise Ships). Kassandra (the COO) has found the following demand function for the Trojan Adventure: D(p)-7000-7p What is the optimal price that Kassandra should set? What is the revenue? 1) (3 points) If the cruise ship can only accommodate 3700 passengers, what should be Kassandra's pricing strategy (price and revenue)? Explain. The probabilities in (a) are based on previous newcomers to the business. According to the marketing department, if Trojan Cruise Ships is willing to invest $4,500 on advertising their "game changing ideas, then these probabilities will change according to the following table. Démand High 0.6 Probability for Mexico Probability for Vancouver 0.6 Medium 0.3 0.4 Low 0.1 0 b) (2 points) Should Diego invest in advertising if the Mexico cruise is purchased? Explain. c) (2 points) Should Diego invest in advertising if the Canada cruise is purchased? Explain. d) (3 points) What overall strategy would you recommend to Diego? Be sure to justify your complete strategy. (Note: If calculations were shown in previous responses, you do not need to re-show work; only show new work or comparisons here.). e) (4 points) Trojan Cruise Ships decides to name the voyage that you have determined above as Trojan Adventure. For the rest of this problem assume that Trojan Adventure performs as a monopoly in that market (you can ignore all previous data about Trojan Cruise Ships). Kassandra (the COO) has found the following demand function for the Trojan Adventure: D(p)-7000-7p What is the optimal price that Kassandra should set? What is the revenue? 1) (3 points) If the cruise ship can only accommodate 3700 passengers, what should be Kassandra's pricing strategy (price and revenue)? Explain.

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b If the Mexico cruise is purchased Diego should invest in advertising if the expected value of the additional profit from investing in advertising is greater than the cost of advertising To calculate ... View the full answer