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 monopoly price.What is the revenue collected from the fixed fee portion of the price?
A)$10,240
B)$7,870
C)$2,560
D)$1,440

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 monopoly price.What is the revenue collected from the fixed fee portion of the price?
A)$10,240 
B)$7,870 
C)$2,560 
D)$1,440

Quizplus · Accepted Answer

To calculate the revenue collected from the fixed fee portion of the two-part pricing strategy, we need to find the consumer surplus at the monopoly quantity of 40 units, which is $3,200. Then, we add the monopoly revenue at 40 units, which is $5,120. Therefore, the total revenue under two-part pricing is $8,320. 
To find the revenue collected from the fixed fee portion, we subtract the revenue collected from the per-unit pricing strategy (monopoly revenue at 40 units), which is $5,120, from the total revenue under two-part pricing, which is $8,320. Therefore, the revenue collected from the fixed fee portion is $2,560 (C).

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