Consider three pricing strategies that the firm can pursue:
A.optimal two-part tariff pricing
B.perfect price discrimination
C.single-price monopoly pricing
Of these three strategies, which method gives the firm the highest profit?
A)optimal two-part tariff pricing
B)perfect price discrimination
C)single-price monopoly pricing
D)The profit is the same under optimal two-part tariff pricing and perfect price discrimination, and the profit is higher than under single-price monopoly pricing.

Question

Quizplus · Accepted Answer

Both optimal two-part tariff pricing and perfect price discrimination allow the firm to capture the entire consumer surplus, leading to the highest possible profit, which is higher than the profit from single-price monopoly pricing.

Consider Three Pricing Strategies That the Firm Can Pursue