The two- part tariff is an efficient pricing solution because:
A)is applied to homogenous consumers.
B)trendy night clubs use it.
C)the product is sold at marginal cost.
D)it extracts the maximum consumer surplus.

Question

Quizplus · Accepted Answer

A two-part tariff is efficient because it allows the product to be sold at marginal cost, which leads to an efficient allocation of resources.

The Two- Part Tariff Is an Efficient Pricing Solution Because