Both first-degree price discrimination and optimal two-part tariff pricing maximize economic surplus.

Question

Quizplus · Accepted Answer

Both first-degree price discrimination and optimal two-part tariff pricing can increase economic surplus by allowing firms to capture more consumer surplus and increase their profits. In both cases, the pricing strategies lead to a more efficient allocation of resources between buyers and sellers.

Both First-Degree Price Discrimination and Optimal Two-Part Tariff Pricing Maximize