This paper examines the economic consequences of allocating common costs by (1) gross revenues, (2) directly attributable costs, and (3) relative output levels (such as ton-miles) to determine fully distributed cost prices for regulated firms. The analysis characterizes FDC tariffs by examining...

This article considers two schemes of regulation for firms that serve both monopoly markets and markets subjected to substantial competition. The first form ("cost-based" regulation) combines elements of rate-of-return regulation (on monopoly markets) with fully distributed cost pricing, much...

This chapter examines some of the optimal policies that are used to control a natural monopoly. Although the traditional view suggests that government intervention and natural monopoly go hand in hand, economic analysis since the late 1960s has suggested rather forcefully that there are ways to...

and Statement of Purpose -- 1 The Inefficacy of Profit Level Regulation for the Natural Monopoly Markets of Diversified Firms -- A. An Economic Overview -- B. A Legal Overview -- 2 The Welfare Ingredients of Price Level Regulation: Incentives and Decisional Options -- A. The Firm’s Incentives...

This article examines the nature of economically efficient tariffs when there exists rivalry among firms that produce imperfectly substitutable outputs with economies of scale and that operate under a viability constraint. Pricing principles are derived and related to the rules developed in the...