In two-part pricing with identical consumers, a firm
A) charges a lump-sum fee equal to the consumer surplus.
B) sets unit price below marginal cost.
C) should go with single-price monopoly pricing to maximize profits.
D) Both A and B.
Question 2
By shutting down, a firm
A) stops receiving revenue but continues to pay variable costs.
B) stops receiving revenue and is stuck with its fixed costs.
C) avoids its sunk costs as well as its variable costs.
D) can avoid paying taxes on its previously earned profits.
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