Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose a nonlinear price discriminating monopolist faces an inverse demand curve: P = 120 - Q, and can set three prices depending on the quantity

image text in transcribed
Suppose a nonlinear price discriminating monopolist faces an inverse demand curve: P = 120 - Q, and can set three prices depending on the quantity a consumer purchases. The firm's profit is: It = P1 Q1 + P2 (Q2 - Q 1 ) + P3 ( Q3 - Q2) - mQ3, where p, is the high price charged on the first units Q, (first block) and p2 is a lower price charged on the next (Q2 - Q, ) units and p3 is the lowest price charged on the (Q3 -Q2) remaining units. Q3 is the total number of units actually purchased, and m = $40 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. The profit-maximizing value for (round your answers to the nearest penny) P1 = $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Macroeconomics

Authors: N Gregory Mankiw

8th Edition

1305971507, 9781305971509

More Books

Students also viewed these Economics questions

Question

Discuss the scope of Human Resource Management

Answered: 1 week ago

Question

Discuss the different types of leadership

Answered: 1 week ago

Question

Write a note on Organisation manuals

Answered: 1 week ago

Question

Define Scientific Management

Answered: 1 week ago

Question

Explain budgetary Control

Answered: 1 week ago

Question

1. Empirical or factual information,

Answered: 1 week ago

Question

1. To take in the necessary information,

Answered: 1 week ago