In the situation in which consumers have nonidentical demands in two- part pricing, the profit- maximizing user fee is equal to the marginal cost of use.

Question

Quizplus · Accepted Answer

In two-part pricing with nonidentical demands, the profit-maximizing user fee is not necessarily equal to the marginal cost of use. It depends on the elasticity of demand for each consumer group and the firm's cost structure. The user fee should be set to capture as much consumer surplus as possible while ensuring that the fee is not so high that it reduces demand to the point where profit is lower.

In the Situation in Which Consumers Have Nonidentical Demands in Two-