With an Optimal Two-Part Tariff

question 192

Multiple Choice

With an optimal two-part tariff

• A)consumer surplus equals producer surplus.
• B)all consumer surplus is transformed into profit.
• C)consumers maximize consumer surplus.
• D)the firm earns zero profit.

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Definitions:

CVP Analysis

Cost-Volume-Profit Analysis, an accounting tool used to determine how changes in costs and volume affect a company's operating income and net income.

Variable

In finance and economics, a variable represents a quantity or factor that can change and influence outcomes, such as price, interest rates, or investments.

Fixed

Pertaining to assets, costs, or charges that do not vary with the level of production or sales in the short term.

Cost Behavior Analysis

The study of how specific costs change in relation to changes in an organization's activity level.