Which of the Following Statements About Two-Part Tariffs Is False

question 103

Multiple Choice

Which of the following statements about two-part tariffs is false?

• A)Because each individual has a different individual demand curve, if there is just one entrance fee some consumers will be able to reap some consumer surplus.
• B)The producer cannot capture the entire consumer surplus because the entrance fee might discourage some potential consumers even though they would have been willing to pay a lesser entrance fee.
• C)Two-part tariff pricing allows a producer to capture the entire consumer surplus.
• D)For two-part tariff pricing to be successful, the producer must be able to identify two distinct customer groups.

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Definitions:

Change in Units

The difference in the number of units, items, or parts between two periods, often used in inventory, production, or sales analysis.

Break-Even Point

The level of production or sales at which total costs equal total revenues, leading to no net loss or gain.

Units

Individual components or quantities considered as part of a whole, often used in the context of production or sales.

Dollars of Sales

Refers to the total value, in dollars, of all sales transactions completed over a specific period.