ECO - At a student café, there are equal numbers of two types of customers
Question # 00016703
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Updated on: 06/02/2014 11:47 PM Due on: 06/03/2014
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 classes
Coffee 70 60
banana 50 100
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?
Students with early classes Students without early classes
Coffee 70 60
banana 50 100
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?
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Solution: ECO - At a student café, there are equal numbers of two types of customers