Suppose that Marcus has the following demand curve relating the quantity demanded of electricity
(measured in Kilowatt hours) to the price of electricity (measured in cents per KWH):
QKWH = 1600 − 100P
Marcus choose between two electricity providers with different pricing schemes. ShockCo prices electricity using a simple flat rate of $.08 per KWH. CurrentStep uses "multi-part pricing," that involves
charging the same consumer different rates for additional units purchased, with the following schedule:
First 100 KWH $.14 per KWH
Next 200 KWH $.10 per KWH
Next 200 KWH $.08 per KWH
Remaining KWH $.06 per KWH