Skip to Main Content
Managerial Economics and Strategy, 2/e
book

Managerial Economics and Strategy, 2/e

by Jeffrey M. Perloff, James A. Brander
February 2016
Beginner to intermediate content levelBeginner to intermediate
500 pages
33h 40m
English
Pearson
Content preview from Managerial Economics and Strategy, 2/e

10.5 Two-Part Pricing

We now turn to another form of nonuniform pricing, two-part pricing. It is similar to nonlinear price discrimination in that the average price per unit paid by a consumer varies with the number of units purchased by that consumer.

With two-part pricing, the firm charges each consumer a lump-sum access fee for the right to buy as many units of the good as the consumer wants at a per-unit price.15 Thus, a consumer’s overall expenditure for amount q consists of two parts: an access fee, A and a per-unit price, p. Therefore, expenditure is E=A+pq. [&E|=|A|+|pq.&]16 Because of the access fee, the average amount per unit that consumers pay is greater if they buy a small number of units than if they buy a larger number.

Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Start your free trial

You might also like

Managerial Economics

Managerial Economics

Donald N. Stengel
Managerial Economics

Managerial Economics

Vanita Agarwal
Principles of Managerial Finance, 15th Edition

Principles of Managerial Finance, 15th Edition

Scott B. Smart, Chad J. Zutter, Lawrence J. Gitman

Publisher Resources

ISBN: 9780134472553