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Two-part Tariff

entry/usage - consumers charged both an entry fee and a usage fee  

  • ie. amusement parks, golf course, resorts
  • will use entry fee to try to capture as much consumer surplus as possible
  • for just 1 consumer, will set usage fee at marginal cost and entry fee to capture all of the consumer surplus
  • for more than 1 consumer:
    • will set usage fee higher than marginal cost
    • will set entry fee to capture all of consumer surplus of consumer w/ the least demand
Subject: 
Economics
Subject X2: 
Economics

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