Multipleunit Pricing Strategies

When products have different values for different customers, profits can sometimes be enhanced by using multiple-unit pricing strategies. With multiple-unit pricing, all customers typically face the same pricing schedule, but the price paid is determined by the value to consumers of the total amount purchased. Unlike single-unit pricing, where all customers are charged a unit price that sets MR = MC, multiple-unit pricing can result in some combination of per-unit and "lump sum" fees. Like price discrimination, multiple-unit pricing strategies have proven an effective means for extracting consumers' surplus for the benefit of producers.

two-part pricing

A per-unit fee equal to marginal cost, plus a fixed fee equal to the amount of consumers' surplus generated at that price

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