What price should be charged for the bundle?

Reference no: EM13178675

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?

Reference no: EM13178675

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