Business, 12.03.2021 15:50 vpowell5371

Suppose a nonlinear price discriminating monopolist faces an inverse demand curve: P = 175 - Q
and can set three prices depending on the quantity a consumer purchases. The firm's profit is:
pi = P1 Q1 + P2 (Q2 - Q1) + P3 (Q3 - Q2) - mQ3
where p1 is the high price charged on the first units Q1 (first block) and p2 is a lower price charged on the next (Q1 - Q2) units and is the lowest price charged on the remaining (Q3 - Q2) units. Q3 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 p1, p2, and p3, and the firm's profits.

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Suppose a nonlinear price discriminating monopolist faces an inverse demand curve: P = 175 - Q