PLAN103 Lecture Notes - Lecture 8: Vise, Pricing Strategies, Externality
Document Summary
Price so that it is accessible to everyone. Externalities: consequences of a product of service that doesn"t not reflect in the price, not pricing, example: you telling something you learned from school and then telling someone else is a positive externality, driving -> pollution. Marginal vs. average cost pricing: revenue neutral, marginal doesn"t not give the municipality more revenue and vise versa. Learn about the theory behind the arguments put forth by blais: need to understand economic theory of what is being advocated before we can discuss limits and implementation, learn to critically analyze policy currently being used in practice. Build a model to explain graphically two issues with pricing public goods (externalities; avg vs. Needs to be a simplification of the real world.