Profit Maximizing with Price Discrimination
- First, set the marginal revenue equal to the marginal cost in each market, which will be equal to the price.
- If not already done, it is helpful to invert the demand curve so you have price equal to a function. Then multiply them by quantity again and derive to find the marginal revenues.
- If the equations are intertwined, then you have to solve for a common marginal cost and set the marginal revenues equal, then solve the system of equations.
How to Derive Marshallian, Hicksian, and Slutsky Demand Curves
In order of elasticity,