Advances in Management and Applied Economics

The Simple Chaotic Monopoly Price Growth Model and Third-Degree Price Discrimination

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• Abstract

  To maximize profit, the monopolist must first determine its costs and the characteristics of market demand. The monopoly firm can determine different prices to different consumers. This business practice is called price discrimination. The basic aim of this paper is to construct a relatively simple chaotic monopoly price growth model that is capable of generating stable equilibria, cycles, or chaos. The monopoly firm is practicing third-degree price discrimination.