At a student caf, there are equal numbers of two types of customers with the following values.

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).

The MC of coffee is 10. The MC of a banana is 40. Is bundling more profitable than selling separately? If so, what price should be charged for the bundle?

Transcribed Image Text:

Students with Early Classes Students without Early Classes 60 70 Coffee Banana 50 100