Figure 16-5

-Refer to Figure 16-5.Suppose the firm represented in the diagram decides to use a two-part pricing strategy such that it charges a fixed fee and a per-unit price equal to the competitive price.(This is also called an optimal two-part tariff.)What is the value of the consumer surplus from this pricing strategy?
A)$2,560
B)$5,760
C)$7,870

Question

Figure 16-5
 
-Refer to Figure 16-5.Suppose the firm represented in the diagram decides to use a two-part pricing strategy such that it charges a fixed fee and a per-unit price equal to the competitive price.(This is also called an optimal two-part tariff.)What is the value of the consumer surplus from this pricing strategy?
A)$2,560 
B)$5,760 
C)$7,870

Quizplus · Accepted Answer

In a two-part pricing strategy with a fixed fee and a per-unit price equal to the competitive price, the fixed fee is set to capture all consumer surplus, leaving the consumer surplus at zero.

Figure 16-5 -Refer to Figure 16-5.Suppose the Firm Represented in the Diagram