A Firm Setting a Two-Part Tariff with Only One Customer

question 42

Multiple Choice

A firm setting a two-part tariff with only one customer should set the entry fee equal to:

• A) marginal cost.
• B) consumer surplus.
• C) marginal revenue.
• D) price.

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Definitions:

Over-Justification Effect

The phenomenon where extrinsic rewards decrease a person's intrinsic motivation to perform a task because the action is seen as driven by the reward, not personal interest or enjoyment.

Self-Reference Effect

The finding that information bearing on the self is processed more thoroughly and more deeply, and hence remembered better, than other information.

Public Self-Awareness

Looking outward on the public aspects of the self that others can see and evaluate.

Private Self-Awareness

Looking inward on the private aspects of the self, including emotions, thoughts, desires, and traits.