A Firm Using a Two-Part Tariff Can Produce the Economically

question 78

Multiple Choice

A firm using a two-part tariff can produce the economically efficient outcome by

• A)making the fixed-fee portion of the price as low as possible.
• B)setting the per-unit portion of the price equal to the marginal cost of production.
• C)setting the per-unit portion of the price equal to the average cost of production.
• D)setting the fixed-fee portion of the price at some proportion to the fixed cost of production.

---

Definitions:

Bad News

Information that is unwelcome, disappointing, or negative, often requiring careful communication to mitigate its impact.

Parenthetical Expression

An additional piece of information inserted into a sentence as a non-essential element, often marked by parentheses.

Indirect Approach

A communication strategy where the main point is not stated directly at the beginning but is hinted at or presented later in the message.

Buffer

A temporary storage area or a means to mitigate or soften a negative impact.