At the current price of a good,Al's consumer surplus equals 15 and Ben's consumer surplus equals 15.By using two-part pricing,a monopolist could increase his profit by
A) 8.
B) 16.
C) 15.
D) 30.

Question

Quizplus · Accepted Answer

Two-part pricing allows a monopolist to capture consumer surplus by charging an entry fee (equal to the total consumer surplus) plus a per-unit price equal to marginal cost. Since Al and Ben each have a consumer surplus of 15, the monopolist could charge an entry fee that captures this total consumer surplus of 30 (15+15), thus increasing his profit by 30.

At the Current Price of a Good,Al's Consumer Surplus Equals