A cheese-by-mail club that charges an annual membership fee and an additional fee per cheese shipment utilizes
A) perfect price discrimination
B) third-degree price discrimination.
C) two-part pricing.
D) uniform pricing.

Question

Quizplus · Accepted Answer

The club is using two-part pricing by charging an annual membership fee and an additional fee per cheese shipment. This allows them to capture some of the consumer surplus by making those who buy more cheese pay more for the service, while still attracting those who buy less cheese with the annual membership fee.

A Cheese-By-Mail Club That Charges an Annual Membership Fee and an Additional