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.

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Definitions:

Arguments By Elimination

A method of reasoning where options are systematically rejected until only one option remains as the solution or answer.

Disjunctive Syllogism

A form of logical argument that concludes one disjunct must be false if the other disjunct is true in a "either/or" scenario.

Particular Proposition

A statement in logic that asserts something about one or more but not all members of a class.

Robust

Strong and effective in all or most situations and conditions; capable of withstanding or overcoming adverse conditions.