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Monopolistic Two-Part Pricing Arrangements

✍ Scribed by Richard Schmalense

Book ID
121429358
Publisher
The RAND Corporation
Year
1981
Weight
478 KB
Volume
12
Category
Article
ISSN
0361-915X

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This paper examines the optimal two‐part pricing under cost uncertainty. We consider a risk‐averse monopolistic firm that is subject to a cost shock to its constant marginal cost of production. The firm uses two‐part pricing to sell its output to a continuum of heterogeneous consumers. We show that