Two-part pricing offers a mechanism whereby the firm can
A) charge two different prices to distinct groups of customers.
B) collect two times as much from consumers as a single-price monopoly can.
C) capture some or all of the consumer surplus.
D) reduce some of its fixed costs.
C
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When transactions costs are low, private actions to correct externalities are usually feasible
a. True b. False
The concept of "invisible hand" introduced by Adam Smith explains: a. why people act in their own best interests
b. why the government intervenes to overcome failures in private markets. c. how people, acting out of self-interest, unintentionally promote the general good. d. how comparative advantage and specialization promote international trade. e. how the creation of goods and services generates its own demand by creating employment and income.