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You own a cafe where you sell two kinds of products (i) coffee (ii) bagels. Each morning, there are two types of consumers who visit
You own a cafe where you sell two kinds of products (i) coffee (ii) bagels. Each morning, there are two types of consumers who visit the cafe. For simplicity 4 assume the marginal cost of producing a coffee or a bagel is zero.3 Each type A consumer is willing to pay $6 per coffee, and is willing to buy 2 coffees; and is willing to pay $3 per bagel, and buy up to 2 bagels. There are 20 consumers of type A. Each type B consumer is willing to pay $2 per coffee, and will only buy at most one coffee; and is willing to pay $2 per bagel, and buy up to 4 bagels. There are 40 consumers of type B. 3. (4 pts) All-You-Can-Drink: To boost revenue, you decide to offer an "allyou-can-drink" package for the coffee: if a customer pays for this option, they can drink as many cups of coffee as they want. What price should you charge for the (i) all-you-can-drink coffee package (ii) a single cup of coffee (iii) a single bagel? What is your new total revenue, and how does it compare with your revenue under uniform pricing? Explain
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