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
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
 The conditions are right for bundle pricing to increase profit at Black Diamond Tennis & Golf Club because

Quizplus · Accepted Answer

Bundle pricing involves offering a discount when customers buy multiple products or services together. In the case of Black Diamond Tennis & Golf Club, offering bundle pricing can increase profit because demand prices differ across family types for tennis and golf memberships (option B). This means that some families may value one sport more than the other and be willing to pay more for that membership. Additionally, demand prices are negatively correlated (option C) because as the price of one membership increases, demand for the other membership may decrease. By offering bundle pricing, the club can encourage customers to purchase both memberships together, increasing overall revenue and potentially attracting more customers.

Black Diamond Tennis & Golf Club Offers Golf and Tennis