Figure 16-4
-Refer to Figure 16-4.Suppose the firm represented in the diagram decides to use a two-part pricing strategy such that it charges a fixed fee and a per-unit price equal to the competitive price.(This is also called an optimal two-part tariff.)What is the value of the consumer surplus from this pricing strategy?
A) $2,560
B) $5,760
C) $7,870
D) 0

Question

Figure 16-4 
-Refer to Figure 16-4.Suppose the firm represented in the diagram decides to use a two-part pricing strategy such that it charges a fixed fee and a per-unit price equal to the competitive price.(This is also called an optimal two-part tariff.)What is the value of the consumer surplus from this pricing strategy?
A) $2,560 
B) $5,760 
C) $7,870 
D) 0

Quizplus · Accepted Answer

In a two-part pricing strategy with a per-unit price equal to the competitive price, the fixed fee is set to capture all consumer surplus, leaving the consumer surplus at zero.

Figure 16-4 -Refer to Figure 16-4.Suppose the Firm Represented in the Diagram