Actual and Potential Pricing Practices Under Public and Private Operation
Many of the important differences between public and private ownership or management of large-scale enterprise show up in the pricing practices used in the sale of their products, in some cases even more significantly, though perhaps not as dramatically, as in the methods used for the determination of investment or the deployment of manpower. These differences are especially important in that in cases of natural monopoly, particularly where this relates to economies of scale, price policy decisions are logically prior to investment policy decisions, in that the desirability of a given investment cannot be properly determined without first deciding what pricing policy is to be followed in the utilisation of the investment. Some of these pricing practices seem strongly conditioned by the nature of the regime, others perhaps less so, but it is worthwhile just taking a passing look at some of these differences or perhaps simply tendencies.
KeywordsMarginal Cost Land Rent Historical Cost Transit Line Capital Charge
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