Florida Power and Light (FPL) faces demands during both on-peak and off-peak times. FPL must determine the price per megawatt hour (mWh) to charge during both on-peak and off-peak periods. The monthly demand for power during each period (in millions of mWh) is related to price as follows: D_peak = 2.253 - 0.013P_p + 0.003P_o D_off-peak = 1.142 - 0.015P_o + 0.005P_p Here, D_peak and P_p are demand and price during on-peak times, whereas D_off-peak and P_o are demand and price during off-peak times. In addition, it costs FPL $75 per month to maintain one mWh of capacity. The company wants to determine a pricing strategy and a capacity level that maximize its monthly profit. Objective: To use a NLM to determine prices and capacity when there are two different daily usage patterns: on-peak and off-peak.

Answer rating: 100% (QA)

T begin with the fundmentl equtin is rfit Revenue sts Given there re tw ries nd fr tw di... View the full answer