Reference no: EM132355053

Question

At a student cafe customers consume:

Students with early classes: 68 Coffee 45

Banana

Students without early classes: 58 Coffee 95 Banana

The marginal cost of coffee is 10 and the marginal cost of a banana is 40.

The owner is considering three strategies:

1.Mixed bundling: Price bundle of coffee and a banana for 153, or just a coffee for 68.

2.Price separately: Offer coffee at 58, price a banana at 95.

3.Bundle only: Coffee and a banana for 113. Do not offer goods separately.

Assume there is just on student with an early class, and one student without an early class

Price Strategy Revenue from Price Cost from Pricing Profit from Pricing

Strategy Strategy Strategy

1.Mixed Bundle

2.Price separately

3.Bundle only