A Firm Using a Two-Part Tariff Faces a Tradeoff Because

Multiple Choice

A firm using a two-part tariff faces a tradeoff because

A) the only way to increase the fixed-fee portion of the price is to lower the per-unit portion of the price.
B) the only way to increase total revenue is to lower per-unit profit.
C) any increase in consumer surplus must be offset by a decrease in producer surplus.
D) the smaller the variation between the parts of the price, the greater the deadweight loss generated by the pricing scheme.