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Use the following information to answer the next FIVE questions: You operate the only coffee shop in town, selling coffee and donuts. The marginal cost
Use the following information to answer the next FIVE questions: You operate the only coffee shop in town, selling coffee and donuts. The marginal cost of a coffee is $0.10 per coffee, and the marginal cost of a donut is $0.20 per donut. Suppose you have only two customers, whose willingness to pay for each item is displayed in the following table: Suppose the coffee shop does not bundle its coffee and donuts, 21. The coffee shop's profit-maximizing price for a coffee will be $ ____________. 22. The coffee shop's profit-maximizing price for a donut will be $ ____________. 23. What profit will the coffee shop earn from selling coffee and donuts? $ _________________ Now suppose the coffee shop begins bundling its coffee and donuts, selling them as combos only, each combo consisting of one coffee and one donut. 24. What is the optimal price it should charge for the coffee-donut combo? $ ______________ 25. How much additionalprofit does the coffee shop make by bundling? $ ______________
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