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 ?
None of these papers explicitly considers the details of two-part tariffs along with an examination of farmer participation.
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.
Despite these demonstrations, the subsequent literature on uniform two-part tariffs for the most part considers below marginal cost pricing a thoroughly atypical outcome.
To reach optimality requires two-part tariffs or other complicated nonlinear pricing schemes.
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.
In that instance, previous literature has shown that two-part tariffs suffice to achieve the vertically integrated profit and that the upstream firm's profit maximizing wholesale price strictly exceeds production marginal cost [1, 497-517; 2, 1293-1311].
In the context of two-part tariffs, the paper's main finding can be stated as follows: The sum of entrance fees facing customers is smaller when sellers form a cartel than when they set prices independently; however, per-unit prices are the same whether sellers collude or not.
The two-part tariffs have advantage over Hotelling's lump-sum income taxation.
Second, we extend Professor Wenders's analysis to the case of self-selecting two-part tariffs.
Davis, "The Equity and Efficiency of Two-Part Tariffs in U.