Difference between revisions of "Two-part tariff"

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(Created page with "A '''two-part tariff''' is a price structure in which a customer must buy both the durable and the consumable parts of the offer in order to derive value. ...")
 
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Latest revision as of 20:15, 9 January 2013

A two-part tariff is a price structure in which a customer must buy both the durable and the consumable parts of the offer in order to derive value. The durable part of the offer will be priced relatively high to extract value from customers, while the consumable part will be priced relatively low but above the marginal costs per unit. At times, the price of the durable good is known as the entry fee and the price of the consumable good is known as the metered fee. Contrast with Tying arrangement.