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Public utility pricing for joint demand involving a durable good

Journal Article · · Bell J. Econ. Manage. Sci.; (United States)
DOI:https://doi.org/10.2307/3003206· OSTI ID:7345846
When a utility invests in a large discrete increment of capacity, several years may pass before the additional capacity can be fully used, if the utility's customers need to buy major durable goods to be used jointly with the utility's product. For such a period of adjustment, this study derives price time-paths for the utility for specific models of welfare and (regulated) profit maximization. Among other results, it is shown that if a particular form of price discrimination is permitted, then a stable price level (advocated by some earlier authors) is not optimal. (auth)
Research Organization:
Univ. of Kent, Canterbury, Great Britain
OSTI ID:
7345846
Journal Information:
Bell J. Econ. Manage. Sci.; (United States), Journal Name: Bell J. Econ. Manage. Sci.; (United States) Vol. 7:1; ISSN BJEMA
Country of Publication:
United States
Language:
English

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