If Marginal Cost Is Zero, with an Optimal Two-Part Tariff

question 144

Multiple Choice

If marginal cost is zero, with an optimal two-part tariff

• A)total revenue is maximized.
• B)consumers maximize their surplus
• C)the firm does not have to charge a fixed-fee portion.
• D)firms may not maximize profit.

---

Definitions:

Finance Lease

A lease agreement that transfers substantially all the risks and rewards incidental to ownership of an asset. Title may or may not eventually be transferred.

AASB 16

An accounting standard issued by the Australian Accounting Standards Board specifying the principles for recognition, measurement, presentation, and disclosure of leases.

IFRS 16

The International Financial Reporting Standard issued by the IASB which specifies how an IFRS reporter will recognize, measure, present, and disclose leases.

AASB 16

An accounting standard issued by the Australian Accounting Standards Board that specifies the principles for the recognition, measurement, presentation, and disclosure of leases.