Business, 18.05.2021 22:10 balwinderdev
Suppose a nonlinear price discriminating monopolist faces an inverse demand curve: Upper P equals 120 minus Upper Q, and can set three prices depending on the quantity a consumer purchases. The firm's profit is: pi equals p 1 Upper Q 1 plus p 2 (Upper Q 2 minus Upper Q 1 )plus p 3 (Upper Q 3 minus Upper Q 2 )minus m Upper Q 3, where p 1 is the high price charged on the first units Upper Q 1 (first block) and p 2 is a lower price charged on the next (Upper Q 2 minus Upper Q 1 )units and p 3 is the lowest price charged on the (Upper Q 3 minus Upper Q 2 )remaining units. Upper Q 3 is the total number of units actually purchased, and m = $50 is the firm's constant marginal and average cost. Using calculus, determine the profit-maximizing values for p 1, p 2, and p 3, and the firm's profits.
Answers: 2
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Suppose a nonlinear price discriminating monopolist faces an inverse demand curve: Upper P equals 1...
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