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.

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Definitions:

Reticular Formation

A network of nerves in the brainstem involved in regulating wakefulness and sleep-wake transitions.

Sleeping

The natural resting state in which the body is not active, the mind is unconscious, and the body can repair and rejuvenate itself.

Cerebellum

A region at the back of the brain that plays a key role in motor control, coordination, precision, and timing of movements.

Medulla

The base of the brainstem, controlling vital bodily functions such as breathing, heart rate, and blood pressure.