A telephone company that charges both a monthly fee plus a price per minute used are employing
A) Quality dependent pricing
B) Ordinary price discrimination
C) A two-part tariff
D) Quantity dependent pricing

Question

Quizplus · Accepted Answer

A two-part tariff involves charging customers a fixed fee, known as a "membership" or monthly fee, as well as a usage fee, which is based on the number of minutes used. This pricing strategy is commonly used by telephone companies, and allows them to capture both fixed and variable costs from customers. Quality dependent pricing, ordinary price discrimination, and quantity dependent pricing are not relevant to this type of pricing strategy.

A Telephone Company That Charges Both a Monthly Fee Plus