We calculate a numerical example to illustrate the relationships
between the various pricing strategies. Suppose that w = 10, N =
10, and
. In Table 1 we report the resulting
profits, consumers' surplus, and social welfare.
We report in the last row the results if the
producer knew how much each consumer valued each specific article,
rather than just the values as a function of the number of articles.
In this case of perfect price discrimination the producer
would charge each consumer a different price for each article (thus
the price schedule would have the number of consumers times N
parameters); this provides a benchmark for the maximal profit
possible if the producer could obtain perfect information.
Table 1: Example of one-period complete information
results: Optimal profit per good with w = 10, N =
10, and