With a two-part tariff, T+P, a firm with market power

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    attempts to charge an entry fee T equal to the entire consumer surplus and then charge a usage fee P equal to marginal cost.
     should set the entry fee T equal to the consumer surplus of the customer with the larger demand and the usage fee P below marginal cost, when the firms customers have different levels of demand..
     has producer surplus is equal to T + P*Q, where T is the entry fee and P is the usage fee, if the firms customers have identical demand..
     All of the above.
asked Jun 2, 2013 in Economics by anonymous
    

1 Answer

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attempts to charge an entry fee T equal to the entire consumer surplus and then charge a usage fee P equal to marginal cost.
answered Jun 3, 2013 by Xyz ~Expert~ (3,650 points)

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