search query: @author Hrovatin, N. / total: 5
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Author: | Hrovatin, N. |
Title: | Problematika dolocanja cen v naravnomonopolnih javnostoritvenih panogah |
Journal: | Slovenska ekonomska revija
1994 : VOL. 45:5, p. 434-451 |
Index terms: | |
Freeterms: | economic theories, monopolies, public utilities, price policy, pricing, efficiency, costs, Ramsey pricing, demand, consumer, discrimination |
Language: | slv |
Abstract: | There are two alternatives in the theory of public utilities price formation.According to the first the price should be set at the marginal cost level, which (given the natural monopoly characteristics of these sectors) inevitably results in losses and government subsidies.The second alternative consists of fifferent forms of price discrimination: Ramsey prices, peak - load prices and non-linear outlay schedules, which enable the utility to cover its costs.The economic theory does not provide us with unambiguous answer which price alternative to choose.As the author demonstrates, both alternatives exhibit various theoretical and practical shortcomings.The choice is therefore subject to the social (political) consensus.The regulatory policy of developed countries (France, the UK, the USA) has opted for long-run marginal cost pricing, combined with efficient prices where necessary.The choice of pricing policy has been relaxed by the technological development.Decreasing returns to scale have ceased to exit in the production of many public utilities.Therefore, long-run marginal cost pricing could be used without losses and subsidies. |
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