Compared to Monopoly Pricing, an Optimal Two-Part Tariff

question 109

Multiple Choice

Compared to monopoly pricing, an optimal two-part tariff

• A)reduces economic efficiency.
• B)eliminates the deadweight loss.
• C)equates marginal revenue and average revenue.
• D)increases consumer surplus.

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Definitions:

Continual Buy

Ongoing purchasing actions by consumers for products or services, often due to brand loyalty or satisfaction.

Copy Paper

Standard-sized, thin paper generally used for writing, printing, and photocopying in office and school environments.

Derived Demand

A demand for a commodity, service, or good that arises from the demand for another good or service, for example, the demand for steel being driven by the demand for automobiles.

Hockey Gear

Equipment and apparel used in playing hockey, including sticks, helmets, pads, and skates.