Use the following to answer questions: Table: Myrtle Beach Golf $\begin{array}{l}
\hline \text {Maximum Willingness to Pay for One-Night Stay and One Round of Golf}\
\begin{array}{lcc}
& David & John \
\hline One-Night Stay & 50 & 110 \
Round of Golf & 80 & 35 \
\hline
\end{array}
\end{array}$
-(Table: Myrtle Beach Golf) Refer to the table. Assume that marginal costs of production are zero. If the resort bundles a one-night stay with a round of golf, how much profit will it make on David and John?

Question

Use the following to answer questions: Table: Myrtle Beach Golf $\begin{array}{l}
\hline \text {Maximum Willingness to Pay for One-Night Stay and One Round of Golf}\
\begin{array}{lcc} 
& David & John \
\hline One-Night Stay & 50 & 110 \
Round of Golf & 80 & 35 \
\hline
\end{array}
\end{array}$
-(Table: Myrtle Beach Golf) Refer to the table. Assume that marginal costs of production are zero. If the resort bundles a one-night stay with a round of golf, how much profit will it make on David and John?

Quizplus · Accepted Answer

David's maximum willingness to pay for a one-night stay is $50, and his maximum willingness to pay for a round of golf is $80. So, his total maximum willingness to pay for both is $50 + $80 = $130. The resort can sell him the bundle for any price up to $130 and make a profit.John's maximum willingness to pay for a one-night stay is $110, and his maximum willingness to pay for a round of golf is $35. So, his total maximum willingness to pay for both is $110 + $35 = $145. The resort can sell him the bundle for any price up to $145 and make a profit.If the resort bundles the one-night stay with a round of golf and sells it for $130, it will make a profit of $130 - $0 = $130 on David. If it sells the bundle for $145, it will make a profit of $145 - $0 = $145 on John. So, the total profit the resort will make on David and John is $130 + $145 = $275.

Use the Following to Answer Questions: Table: Myrtle Beach Golf