A firm using a two-part tariff can produce the economically efficient outcome by

A) making the fixed-fee portion of the price as low as possible.
B) setting the fixed-fee portion of the price at some proportion to the fixed cost of production.
C) setting the per-unit portion of the price equal to the average cost of production.
D) setting the per-unit portion of the price equal to the marginal cost of production.

D

Economics

You might also like to view...

Refer to Figure 24-3. Suppose the economy is at point A. If the economy experiences a supply shock, where will the eventual short-run equilibrium be?

A) A B) B C) C D) D

Economics

Import taxes are levied to generate revenue and encourage imports

a. True b. False

Economics