At a student caf, there are equal numbers of two types of customers with the following values. The caf 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

$0.70

$0.60

Banana

$0.50

$1.00

The marginal cost of coffee is $0.10. The marginal cost of a banana is $0.40. Is bundling more profitable than selling separately? If so, what price should be charged for the bundle? Explain in detail and show all the work that supports your response.