Profit-Maximizing Two-Part Tariff  If the monopolist plans on selling to both types of consumers it is always profitable to raise the per-unit price at least a little above marginal cost  Regardless of the types' relative proportions  Extract some of high-demand consumers' surplus without changing surplus of low-demand consumer (already zero)  Raise per-unit price to get more surplus from high-demand consumers  Adjust fixed fee so low-demand consumers' surplus is unchanged  The smaller the faction of low-demand consumer, the more worthwhile it is to raise the per-unit price Max Profits Intuition Conclusion
{}