Which of the following is true when comparing two part tariffs to ordinary price discrimination?
A)Both price schemes generate the same amount of profit in different ways.
B)Both price schemes generate the same amount of profit in the same way.
C)More profit is generated with two- part tariffs.
D)More profit is generated with ordinary price discrimination.

Question

Quizplus · Accepted Answer

Two-part tariffs typically generate more profit than ordinary price discrimination as they allow the seller to capture some consumer surplus by charging a fixed fee in addition to the per-unit price. This can lead to higher profits for the seller without necessarily increasing prices for all buyers. However, the amount of profit generated by each method can depend on the specific market conditions and demand elasticity.

Which of the Following Is True When Comparing Two Part