Optimal second-degree differentiation pricing policy with LINEAR demand function

The main objective in any marketing effort is to consider the optimal conditions to maximize revenue and profit. The optimal market segmentation pricing strategy is investigated under the assumption of an aggregate linear demand function. The optimal conditions to maximize revenue and profit, two closely correlative problems, are obtained respectively. The differentiation pricing policy described here can be easily applied in practice. A numerical example is provided which vividly illustrates the advantage of applying optimal policies.