Revenue Maximization

This lecture explores revenue maximization by analyzing the relationship between prices, customer choices, and generated revenues. It delves into the supplier's perspective, considering different pricing strategies and the impact of customer behavior on revenue optimization. Through a simple example with two products and two customer groups, the instructor illustrates the trade-off between market shares and revenues. By adjusting prices based on customer price sensitivity, suppliers can target specific customer groups to maximize revenues. The lecture emphasizes the importance of understanding customer behavior to make informed pricing decisions and highlights the complexity and richness of revenue optimization models.