Question: Please answer i-M A San Diego resort with a pool and golf course wants to offer monthly memberships to locals. They can be considered a

Please answer i-M A San Diego resort with a pool

Please answer i-M

A San Diego resort with a pool and golf course wants to offer monthly memberships to locals. They can be considered a monopoly in their local market. The management team estimates that there are two types of customers for memberships, families and retired couples, in equal number. The maximum willingness-to-pay for a monthly membership for each type for each service is shown in the table below. Marginal cost is $40 per month per user for both golf and pool. Customer Type Families Retirees Golf $55 $105 Pool $75 $35 Golf + Pool $130 $140 c) The general manager prefers to keep things simple and offer separate pricing. a) What is the profit-maximizing price for golf-only membership? How many units are sold? b) What is the profit-maximizing price for pool membership? How many units are sold? c) What are total resort profits with separate pricing? d) What is consumer surplus for families and for retirees with separate pricing? The marketing group suggest offering a combined membership only (a pure bundle). e) What is the profit-maximizing price for golf + pool bundle? f) How many units are sold? What are resort profits with pure bundling? h) What is consumer surplus with pure bundling? The strategy group believes that mixed bundling can raise profits. i) Which customer group and which product should be excluded from the bundle? j) What are profit-maximizing prices for golf, pool and the package under mixed bundling? k) What are resort profits with mixed bundling? 0 What is consumer surplus with mixed bunding? m) Explain how bundling acts as a price discrimination technique in this case

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