At a student café, there are equal numbers of two types of customers with the following values. The café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (i.e., she cannot price discriminate).Students with Early Classes Students without Early ClassesCoffee $0.70 $0.60Banana $0.50 $1.00The marginal cost of coffee is $0.10. The marginal cost of a banana is $0.40. Is bundling more profitable than selling separately? If so, what price should be charged for the bundle?
At a student café, there are equal numbers of two types of customers with the following values. The café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (i.e., she cannot price discriminate).Students with Early Classes Students without Early ClassesCoffee $0.70 $0.60Banana $0.50 $1.00The marginal cost of coffee is $0.10. The marginal cost of a banana is $0.40. Is bundling more profitable than selling separately? If so, what price should be charged for the bundle?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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At a student café, there are equal numbers of two types of customers with the following values. The café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (i.e., she cannot
Students with Early Classes Students without Early Classes
Coffee $0.70 $0.60
Banana $0.50 $1.00
The marginal cost of coffee is $0.10. The marginal cost of a banana is $0.40. Is bundling more profitable than selling separately? If so, what price should be charged for the bundle?
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