A Firm Using a Two-Part Tariff Can Produce the Economically

Multiple Choice

A firm using a two-part tariff can produce the economically efficient outcome by

A) making the fixed-fee portion of the price as low as possible.
B) setting the per-unit portion of the price equal to the marginal cost of production.
C) setting the per-unit portion of the price equal to the average cost of production.
D) setting the fixed-fee portion of the price at some proportion to the fixed cost of production.