Two- part tariffs:
A)are always better than price discrimination.
B)work best when consumers are similar.
C)work best when consumers vary in their preference for the good.
D)never exploit all of the gains from trade.

Question

Quizplus · Accepted Answer

Two-part tariffs work best when consumers are similar because the firm can charge a uniform entry fee and a per-unit price, maximizing profits when consumer demand is homogeneous.

Two- Part Tariffs