two-part tariff

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Two-Part Tariff

A set fee assessed with a purchase along with a per-unit charge. For example, a credit card carries a two-part tariff if it has an annual fee and a minimum fee with each purchase. A two-part tariff is not necessarily an import tariff.

two-part tariff

see TARIFF.

two-part tariff

a pricing method that involves a charge per unit of GOOD or SERVICE consumed, plus a fixed annual or quarterly charge to cover overhead costs. Two-part tariffs can be used by PUBLIC UTILITIES or firms to achieve the benefits of MARGINAL-COST PRICING while raising sufficient revenues to cover all outlays (so avoiding a deficit and problems of financing it). Simple two-part tariffs are presently used to charge customers for gas, electricity telephones, etc., although more sophisticated multipart tariffs can be adopted to reflect the different marginal costs involved in offering products like electricity and transport services at peak and off-peak periods. See also AVERAGE-COST PRICING, NATIONALIZATION, PEAK-LOAD PRICING.
References in periodicals archive ?
6) The results obtained with two-part tariffs are analogous to the ones that were obtained with linear pricing: with expost licensing the technology of the stand-alone upstream firm is excluded from the standard, and for ex-post licensing to be preferred by SSO members to ex-ante licensing it is necessary that the rents that the vertically integrated firm [V.
Davis, "The Equity and Efficiency of Two-Part Tariffs in U.
Usually two-part tariffs distinguish between average and marginal payment [1].
In addition to constructing a framework for evaluations of the emerging carbon offset market, the article makes two contributions to the theoretical literature on efficient pricing with two-part tariffs.
carriers would use a menu of two-part tariffs, not three-part tariffs.
General theory is covered in sections on marginal cost pricing, Ramsey pricing, peak load pricing, pricing under uncertainty, two-part tariffs and nonlinear pricing, and game theoretic approaches.
Although such a tariff cannot coordinate the channel, it is the best of all possible two-part tariffs from the viewpoint of maximizing manufacturer profit.
Willig(1978) showed that offering optional two-part tariffs can cause a Pareto improvement, as long as all customers are final consumers and the existing tariff is retained as an option.
To reach optimality requires two-part tariffs or other complicated nonlinear pricing schemes.
Also, when the regulated firm moves from linear price to uniform two-part tariffs, the smaller users lose more of their consumer surplus than the larger users.
This explains why the unit wholesale price--and thus demand-enhancing noncontractible investments--may be lower with two-part tariffs than without them.
Since residential local phone service is sold under a menu of two-part tariffs, the authors develop a method for estimating a mixed discrete/continuous demand model.