Two-part tariff: Difference between revisions

Revision as of 22:55, 4 April 2012

Revision as of 21:43, 15 July 2012

Line 1:

{{NoMore footnotes|date=February 2010}}

A '''two-part tariff''' is a [[price discrimination]] technique in which the price of a [[product (business)|product]] or [[Service (economics)|service]] is composed of two parts - a lump-sum fee as well as a per-unit charge. In general, price discrimination techniques only occur in partially or fully [[monopoly|monopolistic]] [[market (economics)|market]]s. It is designed to enable the firm to capture more [[consumer surplus]] than it otherwise would in a non-discriminating pricing environment. Two-part tariffs may also exist in [[Competition (economics)|competitive markets]] when consumers are uncertain about their ultimate demand. Health club consumers, for example, may be uncertain about their level of future commitment to an exercise regime.