{smcl} {* 12Nov2012}{...} {cmd:help tdpd} {hline} {title:Title} {p2colset 5 13 15 2}{...} {p2col :{hi:tdpd} {hline 2}}Third-degree price discriminating monopoly{p_end} {p2colreset}{...} {title:Syntax} {p 4 13 2}{cmd:tdpd} {it:a1 b1 a2 b2 c1 c2 c3}, [invd] {pstd} {title:Description} {pstd} {cmd:tdpd} computes the equilibrium of a third-degree discriminating monopolist facing two groups of consumers: total output and its allocation between the two groups of consumers, prices charged to each group, profit of the monopolist, asf. Results are provided with a precision of two decimals. {pstd} {cmd:tdpd} also computes the equilibrium of the market if the monopoly does not price-discriminate. {break} {pstd} The 7 arguments {it:a1 b1 a2 b2 c1 c2 c3} are compulsory. They define the demands of the two groups of consumers, and the total cost function of the monopolist: {p2colset 10 25 27 2}{...} {p2col :{bf:Demand i:}}Qi = {it:ai} - {it:bi}Pi, i = 1,2{p_end} {p2col :{bf:Total Cost:}}TC = {it:c1} + {it:c2}Q + {it:c3}Q^2{p_end} {pstd} Graphical representations are provided for the two equilibria (discriminating + non-discriminating). Only two combined figures are displayed ({it:MD} and {it:MND}), but the six different graphs composing them can be displayed indivudally using {helpb graph display}. The names of the graphs are as follows: {p2colset 10 25 27 2}{...} {p2line} {p2col :{bf:Discriminating monopoly}}{p_end} {p2col :{it:group1d}}Segment 1{p_end} {p2col :{it:group2d}}Segment 2{p_end} {p2col :{it:marketd}}Entire market{p_end} {p2col :{it:DM}}The three previous graphs horizontally aligned{p_end} {p2line} {p2col :{bf:Non-discriminating monopoly}}{p_end} {p2col :{it:group1nd}}Segment 1{p_end} {p2col :{it:group2nd}}Segment 2{p_end} {p2col :{it:marketnd}}Entire market{p_end} {p2col :{it:NDM}}The three previous graphs horizontally aligned{p_end} {p2line} {title:Option} {pstd} {hi:invd} is used when the parameters {it:a1}, {it:b2}, {it:a2} and {it:b2} define the inverse demands. Algebraically: {break} {bf:Inverse demand i:} Pi = {it:ai} - {it:bi}Qi, and thus Qi = {it:ai}/{it:bi} - 1/{it:bi}Pi, i = 1,2 {break} {title:Examples} {pstd}{inp:. tdpd 100 1 60 1 0 20 .25, invd}{p_end} {pstd}{inp:. graph display marketd}{p_end} {pstd}{inp:. graph display marketnd}{p_end} {pstd}{inp:. tdpd 60 .2 60 .3 2000 40 0}{p_end} {title:Author} {pstd} Sylvain Weber {break} University of Neuchâtel (Switzerland) {break} Institute of Economic Research {break} sylvain.weber@unine.ch {title:Reference} {pstd} The economic theory underlying {cmd:tdpd} is reviewed in: Weber, Sylvain and Pasche, Cyril (2008) "Price Discrimination", {it:Journal of Industrial Organization Education}: Vol. 3, Iss. 1, Article 1.