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Author      Title/Abstract      

Marginal Costs Pricing
Author: William K. Ferry
Date: 5/177
Presented at the AWWA Annual Conference, Anaheim, California, May 11, 1977

Marginal costs pricing is a concept radically different from other concepts used for pricing utility services; and if applied in its entirety, will almost certainly produce too much or too little revenue. Yet if economic theory is to have any relevance to public utility pricing, marginal costs pricing must be the starting point for the investigation. The paper summarizes the concept, places it in perspective with other pricing concepts, gives some examples, and expresses some viewpoints on when and how it should be used.