Author Question: A two-part price is less efficient than a Ramsey. Indicate whether the statement is true or ... (Read 13 times)

jayhills49 · **on:** Jul 1, 2018

A two-part price is less efficient than a Ramsey.

Indicate whether the statement is true or false

Question 2

Ramsey pricing avoids cross subsidy.

Indicate whether the statement is true or false

akudia · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

F The two-part price can be more efficient. Think of it this way: Each part of a two-part price may be set as a Ramsey price and two Ramsey prices should be better than one. With two prices there is opportunity for more subtle adjustment.

Answer to Question 2

F It is possible to have Ramsey prices that cross subsidize.