Aplia: Student Question
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8 . Individual Problems 14-6
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 marginal cost of coffee is 10 and the marginal cost of a banana is 40.
The café owner is considering three pricing strategies:
Mixed bundling: Price bundle of coffee and a banana for 153, or just a coffee for 66.
Price separately: Offer coffee at 56, price a banana at 97.
Bundle only: Coffee and a banana for 113. Do not offer goods separately.
Assume that if the price of an item or bundle is no more than exactly equal to a student's willingness to pay, then the student will purchase the item
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