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

Question

Quizplus · Accepted Answer

A two-part tariff involves charging an initial fee for access to the good (the first part) and then a per-unit price for the good itself (the second part). By setting the per-unit price equal to the marginal cost, the monopolist can extract all the consumer surplus as profit through the initial access fee. Since Al and Ben each have a consumer surplus of 15, the monopolist could increase his profit by 15 + 15 = 30 by charging each of them an access fee equal to their consumer surplus.

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