254 CHAPTER | 8 Efficient Pricing of Electricity 120 Demand 1 Demand 2 S 100 80 60 40 20 0 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8 8.5 9 9.5 10 FIGURE 8.8 Seasonal two-part tariff. Solution: The optimal entry fee is equal to the consumer surplus of the smaller con- sumer (group 1), which in this case is given by