Question

explain why it is true or false, Two part tariffs always involve setting the price per...

explain why it is true or false,

  1. Two part tariffs always involve setting the price per unit above marginal cost.
Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

A two part tariff=marginal cost

The two part tariff system is a price discrimination system.In two part tariff system the firms must set a price to the consumer that is equal to the marginal cost.The purpose of two part tariff is to abstract extra of the consumer surplus,by using a pricing technique made up of two part.Two part tariff is also called two part pricing. Pleasure park's are the best example of two part tariff system,here customers are charged both an entrance fees and usage fees.The two part tariff system firms must set a price that is equal to marginal cost.

  

trr

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
TRUE/FALSE: Breakeven Analysis can be used to evaluate price changes that involve changes in variable costs...
TRUE/FALSE: Breakeven Analysis can be used to evaluate price changes that involve changes in variable costs AND price changes that involve changes in incremental fixed costs. TRUE/FALSE: Apple is a good example of a company that uses a market penetration pricing strategy. TRUE/FALSE: The goal of market skimming is to capture high levels of sales with lower margins per unit.
DOES AN ARITHMETIC SEQUENCE ALWAYS DIVERGE? TRUE/FALSE AND EXPLAIN WHY
DOES AN ARITHMETIC SEQUENCE ALWAYS DIVERGE? TRUE/FALSE AND EXPLAIN WHY
Interference effects always involve the propagation of one single wave. True False The Retina is at...
Interference effects always involve the propagation of one single wave. True False The Retina is at the back of the eye and represents the detector of light rays. True False Diffraction occurs when the light rays bend near the edge of an object. True False A material is Transparent when light waves crossing them have a strong interaction with the atoms. True False Blind Spots are three or four places of the Retina unable to detect light rays. True False...
Is this statement true or false? Explain why the statement is true or false. Two firms,...
Is this statement true or false? Explain why the statement is true or false. Two firms, 1 and 2, can control their emissions of a pollutant according to the following marginal cost equations: MC1 = $1*q1 and MC2 = $1/2*q2, where q1 and q2 are the amount of emissions controlled by firm 1 and firm 2, respectively. In addition, each firm is currently emitting 100 units of pollution and neither firm is controlling its emissions. Assuming the control authority has...
a) Which price discrimination method would the monopoly prefer, first degree price discrimination or a two-part...
a) Which price discrimination method would the monopoly prefer, first degree price discrimination or a two-part tariffs ? Explain why. (3p) (b) Is the market output Pareto efficient in first-degree price discrimination? Why/why not? Explain drawing a diagram. (2p) (c) True or false: A market cannot be Pareto efficient if the total consumers gains from trade is zero. Explain your answer.
Indicate whether the following statement is true or false and then EXPLAIN why. Under monopoly price...
Indicate whether the following statement is true or false and then EXPLAIN why. Under monopoly price is greater than average revenue but lower than marginal revenue.
Is the statement true or false? Ans explain why the statement is true or false. Assume...
Is the statement true or false? Ans explain why the statement is true or false. Assume a firm’s marginal costs of pollution control can be expressed as MC = 10Q where Q is the units of pollution controlled. In addition, assume the firm is currently emitting 25 units of pollution per time period, Q = 0, and the government has decided to impose a tax of $20 on each unit of pollution emitted by the firm. The optimal level of...
State whether the following statements are True or False, and explain/show why. A single-price monopolist maximizes...
State whether the following statements are True or False, and explain/show why. A single-price monopolist maximizes profit where marginal benefit is at its maximum. A single-price monopolist maximizes profit where marginal cost is at its minimum. The profit-maximizing point for a single-price monopolist is also the revenue maximizing point. In general, price discrimination raises the efficiency of markets.
Determine whether each of the following statements is true or false and explain why you think...
Determine whether each of the following statements is true or false and explain why you think so. a) In perfectly competitive market, the long-run supply curve is downward sloping in decreasing cost industry. b) The marginal revenue for a perfectly competitive firm is equal to the market price. The marginal revenue for a monopolist is greater than the market price for positive quantities of output. c) To calculate the Lerner Index for a particular firm, you need to know price...
1. Determine whether each of the following statements is true or false and explain why you...
1. Determine whether each of the following statements is true or false and explain why you think so. a) In perfectly competitive market, the long-run supply curve is downward sloping in decreasing cost industry. b) The marginal revenue for a perfectly competitive firm is equal to the market price. The marginal revenue for a monopolist is greater than the market price for positive quantities of output. c) To calculate the Lerner Index for a particular firm, you need to know...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT