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At a student café, there are equal numbe...
This question was answered on Sep 26, 2013. View the Answer
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 changed for the bundle?
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8486813 solution.docx

ANSWER
If the seller has separate prices, and cannot distinguish between two kinds of customers, then all
will buy at the time when price is lower. For coffee, since price for early class students...

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