Question

William is planning his wedding and is deciding on the bar package for the reception dinner. the venue offers an open bar package where william will be charged $55 dollars per guest regardless how much a guest drinks. the venue also offers a consumption-based model where william will be charged based on what is consumed by his guests at the end of the night. which of the information below is critical for william to make the decision?

• information 1: how many guests will be at the party
• information 2: how much each person will drink on average
• information 3: the average drink cost

A. Only information 1 and 2 are critical to the decision
B. Only information 1 and 3 are critical to the decision
C. Only information 2 and 3 are critical to the decision
D. All three pieces of information are critical for the decision

Answer 1

William needs all three pieces of information to decide between an open bar and a consumption-based model for his wedding; the number of guests, the average consumption per guest, and the average drink cost are all critical factors in this financial decision.

Step-by-step explanation:

When William is planning the bar package for his wedding reception, all three pieces of information are vital for making an informed decision. The number of guests attending (information 1) will provide a base for estimating the total potential consumption and cost. Knowing how much each person will drink on average (information 2) allows for an assessment of the total volume of drinks that could be consumed, and this can be especially variable depending on the demographics of the guests and the nature of the event. Finally, the average drink cost (information 3) offered by the venue is crucial to calculate the break-even point at which the consumption-based model would equal the cost of the open bar package. To make a cost-effective decision, William should consider these three factors in relation to each other rather than in isolation.