TWO-PART TARIFFS AND MULTISTAGE PROGRAMMING

Ilko Vrankić, Zrinka Lukač, Mira Oraić
2011 Croatian Operational Research Review  
This article demonstrates the relationship between the utility function's parameters which represent consumer's taste and the reservation price. We describe the changes in the reservation price analytically and supplement the geometrical illustrations by economic interpretations. We formulate the monopolist's problem of setting the price of a capital good and the price of a service that the capital good provides as the two stage programming problem and illustrate the influence of consumers'
more » ... erences and their income on the service market client structure and monopolist's decisions on couple of illustrative examples.
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