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A university has determined that its students fall into two categories when it comes to room and board demand. University planners call these two typesSleepers and Eaters. The reservation prices for a dormitory room and basic meal plan of the two types are as follows:
Dorm Room Meal Plan
Sleepers $5,500 $2,500
Eaters $3,000 $6,000
a. What price will be charged for Dorm Rooms and Meal Plans if the university charges separate prices? What will total revenue be?
b. Would the university be better off bundling (pure bundling, not mixed) dorm rooms and meal plans? If so, what would be the price of the bundle? What would maximum revenue be?
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This is a follow-up discussion to the Unemployment in Your Hometown Assignment.
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