Introduction to Management Science 12th Edition by Bernard Taylor

Exercise 18

Blue Ridge Power Company has a maximum capacity of 2.5 million kilowatt-hours (kWh) of electric power available on a daily basis. The demand (in millions of kWh) for power from its customers for high-demand (peak) hours and low-demand (off-peak) hours is determined by the following formulas:
high demand: 5.8 - 0.06 p h + 0.005 p l
low demand: 3.0 - 0.11 p l + 0.008 p h
The variable p l equals the price per kilowatt-hour during low-demand hours, and p h is the price per kilowatt-hour during high-demand (peak) hours.
Formulate and solve a nonlinear programming model to determine the price structure (per kWh) that will maximize revenue.