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American Economic Review 1975

Cross-subsidization: pricing in public enterprise

Gerald R. Faulhaber

Abstract

Analyzes the issues of cross-subsidization in public enterprises with economies of joint production. Incentives to competitive entry and subsidy-free prices; Relation of welfare maximizing prices to subsidy-free prices; Price elasticity of demand; Costs of alternative means of supply; Choice between protected monopoly and open competition.

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