If a firm is practicing two- part pricing and it is ______charging a user fee that is its marginal cost, it has customers with_______ demands.
A)greater than; nonidentical
B)greater than; identical
C)less than; nonidentical
D)less than; identical

Question

Quizplus · Accepted Answer

In a two-part pricing strategy, if a firm charges a user fee greater than its marginal cost, it implies that the firm is dealing with customers who have nonidentical demands. This allows the firm to extract more consumer surplus from those with higher willingness to pay.

If a Firm Is Practicing Two- Part Pricing and It