Competition and two-part tariffs Hayes, Beth

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Hayes, Beth
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The Journal of Business
Tariffs -- Research; Tariff preferences -- Research; Free trade -- Economic aspects
For the most part, two-part tariffs have been viewed in the past as price-discriminatory and within the exclusive domain of companies that have real market power (companies that are actual or virtual monopolies). However, two-part tariffs may also be financially beneficial to companies in highly competitive markets, since these price policies provide some assurance to risk-averse buyers and minimize uncertainty related to demand. Moreover, the marginal prices achieved through two-part tariffs that are less than marginal costs can be financed by fixed one-time only costs, such as health club entry fees.
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