Ramsey Pricing of Inputs with Downstream Monopoly Power and Regulation. Implications for Railroad Rate Setting

Ramsey Pricing of Inputs with Downstream Monopoly Power and Regulation. Implications for Railroad Rate Setting

The rules of Ramsey pricing should be adjusted where the regulated firm is not selling to consumers or to perfectly competitive industries. Some rail charges should be below Ramsey prices.

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Optimal Public transport Price and Service Frequency

Because values of time and passenger behaviour depend on the level of frequency it is found that: (1) in urban public transport there may be one low-deficit local optimum and one high-deficit local optimum, one of which is global; (2) contrary to what might be expected, optimal financial deficit per passenger is typically larger for high frequency services than for low-frequency services; (3) the optimal off-peak may exceed the optimal peak price.

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