Socially Optimal Pricing with Rivalry and Economies of Scale

Ronald R. Braeutigam

RAND Journal of Economics, 1984, vol. 15, issue 1, 127-134

Abstract: 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 literature for the regulated monopolist. For some firms excess profits may prevail at efficient prices, and the form of the inverse elasticity rule is altered in markets with rivalry. However, the standard efficient pricing rules and increased welfare results if regulators are empowered to implement lump-sum interfirm payments. A numerical example is provided.

Date: 1984
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://links.jstor.org/sici?sici=0741-6261%2819842 ... O%3B2-F&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rje:randje:v:15:y:1984:i:spring:p:127-134

Ordering information: This journal article can be ordered from
https://editorialexp ... i-bin/rje_online.cgi

Access Statistics for this article

More articles in RAND Journal of Economics from The RAND Corporation
Bibliographic data for series maintained by ().