Black Diamond Tennis & Golf Club offers golf and tennis memberships to the residents of Black Diamond,Ohio,in which there are two types of families: golf-oriented families and tennis-oriented families.There are 100 golf-oriented families and 100 tennis-oriented families in Black Diamond.Forecasted demand prices for golf and tennis memberships by family type are given below.There is no way to identify family types for pricing purposes,and all costs are fixed so that maximizing total revenue is equivalent to maximizing profit. Demand Prices for Golf and Tennis Memberships $$\begin{array} { | l | l | l | }
\hline \text { Type of family } & \begin{array} { l }
\text { Tennis } \
\text { membership only }
\end{array} & \begin{array} { l }
\text { Golf membersh? } \
\text { only }
\end{array} \
\hline \text { Tennis-oriented } & \$ 150 & \$ 50 \
\hline \text { Golf-oriented } & \$ 75 & \$ 200 \
\hline
\end{array}$$ The conditions are right for bundle pricing to increase profit at Black Diamond Tennis & Golf Club because

Question

Black Diamond Tennis & Golf Club offers golf and tennis memberships to the residents of Black Diamond,Ohio,in which there are two types of families: golf-oriented families and tennis-oriented families.There are 100 golf-oriented families and 100 tennis-oriented families in Black Diamond.Forecasted demand prices for golf and tennis memberships by family type are given below.There is no way to identify family types for pricing purposes,and all costs are fixed so that maximizing total revenue is equivalent to maximizing profit. Demand Prices for Golf and Tennis Memberships $$\begin{array} { | l | l | l | } 
\hline \text { Type of family } & \begin{array} { l } 
\text { Tennis } \
\text { membership only }
\end{array} & \begin{array} { l } 
\text { Golf membersh? } \
\text { only }
\end{array} \
\hline \text { Tennis-oriented } & \$ 150 & \$ 50 \
\hline \text { Golf-oriented } & \$ 75 & \$ 200 \
\hline
\end{array}$$ The conditions are right for bundle pricing to increase profit at Black Diamond Tennis & Golf Club because

Quizplus · Accepted Answer

The given information shows that demand prices for tennis and golf memberships differ across family types. This is represented by the different prices for tennis and golf memberships for each family type. Additionally, demand prices could be negatively correlated since some families who are willing to pay more for one membership may not be willing to pay as much for the other membership. Thus, both option B and C are correct, leading to choice E as the best answer.

Black Diamond Tennis & Golf Club Offers Golf and Tennis