You realize that you can probably raise your profits by price discriminating by charging different prices at your coffee shop in Austin where you sold 400 coffee combos per week at $5 and 300 combos at $6. You have fixed costs of $1500 per week. In addition, it costs you $2 per combo in variable costs (ingredients, labor, etc.).
1. Calculate the demand function.
2. Using the demand function, calculate the profit-maximizing price and quantity.
3. What are your profits?