Explain the concept of two-part pricing.

Explain the concept of two-part pricing.

Two-part pricing is a pricing strategy where a seller charges customers two separate fees for a product or service. The first fee is a fixed fee, also known as a membership fee or access fee, which allows customers to access the product or service. The second fee is a variable fee, which is charged based on the quantity or usage of the product or service. This strategy allows the seller to capture additional revenue by charging customers for both access and usage, and it can be used to maximize profits by extracting more value from customers who have a higher willingness to pay.