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What is the difference between two part and three-part tariff?

What is the difference between two part and three-part tariff? A two-part tariff (2PT) imposes both a fixed (access) fee and a per-unit (usage) fee, and a three-part tariff (3PT) generalizes it by bundling some free units (an allowance) into the fixed fee.

What is difference between maximum and double tariff tariff?

What is the difference between two part tariff and maximum demand tariff? … A separate maximum demand meter is used. c. Semi fixed charges are also included.

What is the main disadvantage of two-part tariff?

What is the main disadvantage of two-part tariff? A customer has to pay semi-fixed charges. A customer has to pay fixed charges.

What is tariff and types?

There are two types of tariffs: A specific tariff is levied as a fixed fee based on the type of item, such as a $1,000 tariff on a car. An ad-valorem tariff is levied based on the item’s value, such as 10% of the value of the vehicle.

What is flat rate tariff?

The flat rate tariff is defined as a flat, unchanging charge that allows the user to consume up to a maximum amount. These rates are also sometimes called fixed rates and are an example of a power tariff. … Customers with metered supply however pay lower rates than those charged by the flat rate tariff.

What are the objectives of tariff?

There are objectives in tariff system as:

  • Equal distribution of cost :
  • Recovery of capital investment:
  • Recovery of running cost:
  • Recovery of miscellaneous cost:

What is the main disadvantage of two port traffic?

What is the main disadvantage of two port tariff? a. He has to pay semi fixed charges.

What are the advantages and disadvantages of two-part tariff?

In most cases, a two-part tariff will be more profitable than regular monopoly pricing since it enables producers to sell a larger quantity and also capture more consumer surplus (or, more accurately, producer surplus that would otherwise be consumer surplus) than it could have under regular monopoly pricing.

What are the advantages of two-part tariff?

To sum up, compared with linear pricing pattern, two-part tariff is more encouraging, more adjustable, and has many other advantages especially in a developing market. Results show that the equilibrium price per unit of a two-part tariff is lower than margin cost.

What is a tariff example?

A tariff, simply put, is a tax levied on an imported good. There are two types. A “unit” or specific tariff is a tax levied as a fixed charge for each unit of a good that is imported – for instance $300 per ton of imported steel. … An example is a 20 percent tariff on imported automobiles.

Who benefits from a tariff?

Tariffs mainly benefit the importing countries, as they are the ones setting the policy and receiving the money. The primary benefit is that tariffs produce revenue on goods and services brought into the country. Tariffs can also serve as an opening point for negotiations between two countries.

What is effective tariff rate?

In economics, the effective rate of protection (ERP) is a measure of the total effect of the entire tariff structure on the value added per unit of output in each industry, when both intermediate and final goods are imported.

Is flat rate pay better than hourly?

In a flat rate system, newer mechanics may take longer on jobs and may be paid less overall than if they were in an hourly rate pay system. For technicians who have extensive experience and certifications, the value of flat rate pay may also be lower than what they might earn in an hourly rate pay system.

How is flat rate interest calculated?

It is popularly used in personal loans and hire purchase (car) loans. (Original Loan Amount x Number of Years x Interest Rate Per Annum) ÷ Number of Instalments = Interest Payable Per Instalment. The very simple formula to calculate Flat Rate Interest.

What is the difference between fixed rate and flat rate?

The term « fixed rate » is associated with the yield or accrual on interest-bearing items, such as bonds and loans. By contrast, « flat rate » describes a pricing model used by producers with respect to volume.

What are requirements of tariff?


(1) It should be easier to understand. (2) It should provide low rates for high consumption. (3) It should encourage the consumers having high load factors. (4) It should take into account maximum demand charges and energy charges.

How do you define power factor?

Power factor is an expression of energy efficiency. It is usually expressed as a percentage—and the lower the percentage, the less efficient power usage is. Power factor (PF) is the ratio of working power, measured in kilowatts (kW), to apparent power, measured in kilovolt amperes (kVA).

Which type of tariff is most suitable for domestic load?

Some of the most important types of tariff are as follows;

  • Flat Demand Rate tariff.
  • Straight-line Meter rate tariff.
  • Block meter Rate tariff.
  • Two-part tariff.
  • Power factor tariff.
  • Seasonal rate tariff.
  • Peak load tariff.
  • Three-part tariff.

Which tariff is used by small commercial consumers?

Q4. Which tariff is used by the small commercial consumers? a. Maximum demand tariff.

Which tariff is also known as the average power factor tariff?

Which tariff is also known as the average power factor tariff? a. Sliding scale tariff.

How do you calculate a two-part tariff?

To summarize, a two-part tariff for consumers with identical demands would (1) set usage fee (price per unit) equal to MC (P = MC), and (2) set a membership fee (entry fee) equal to consumer surplus at this price (T = CS at P = MC). The two-part price will result in (1) CS = 0, and (2) PS = T + (P – MC)Q = T.

What type of price discrimination is a two-part tariff?

A two-part tariff (TPT) is a form of price discrimination wherein the price of a product or service is composed of two parts – a lump-sum fee as well as a per-unit charge. In general, such a pricing technique only occurs in partially or fully monopolistic markets.

Is Costco a two-part tariff?

Costco does it with its annual membership fee. In microeconomics this is called two-part pricing. The purpose of these fees is to capture some upfront value. Then the marketer can position their services at a lower price.

Are tariffs good for the economy?

Tariffs damage economic well-being and lead to a net loss in production and jobs and lower levels of income. Tariffs also tend to be regressive, burdening lower-income consumers the most.

What is a tariff rate?

Tariff rates, i.e., taxes levied by foreign customs on the value of imported products and/or taxes and other fees, vary depending on the product and country, existence of a preferential trade agreement and other reasons. … In addition to tariffs, countries often impose national sales and local taxes, and customs fees.

Does Japan have high or low tariffs?

The Customs and Tariff Bureau of Japan’s Ministry of Finance administers tariffs. The average applied tariff rate in Japan is one of the lowest in the world. Simple average applied Most Favored Nation (MFN) tariff for Japan, according the WTO data, is as follows: Total — 4.3%



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