Which of the Following Is an Example of a Two-Part

question 377

Multiple Choice

Which of the following is an example of a two-part tariff?

• A) price discrimination based on the buyers' willingness to pay
• B) charging a hookup fee plus a monthly charge equal to marginal cost
• C) higher sales tax on specific products
• D) different prices based on the cost of production and quantity bought
• E) A regulated firm uses marginal cost pricing for some customers and average cost pricing for other customers.

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Definitions:

Demand Curve

A chart that illustrates how the demand for a product varies with its price.

Marginal Cost

The incremental expenditure incurred from manufacturing an additional unit of a product or service.

Mineral Water

Water containing minerals or other dissolved substances that alter its taste or give it therapeutic value, often sourced from a well or spring.

Monopoly

A market structure characterized by a single seller, selling a unique product in the market without any close substitutes, dominating the market.