The one-third rule: Learning about the net economic benefit of a subsidy from a single observation

Autor(en): Schimmelpfennig, J
Stichwörter: Business & Economics; Economics; Government & Law; Political Science
Erscheinungsdatum: 1998
Herausgeber: KLUWER ACADEMIC PUBL
Journal: PUBLIC CHOICE
Volumen: 95
Ausgabe: 3-4
Startseite: 331
Seitenende: 334
Zusammenfassung: 
The subsidization of a natural monopoly is justified on welfare-economic grounds if the resulting total economic surplus exceeds total costs. Using rather standard assumptions, a simple check, managing with a minimum of information and, in particular, without virtually any knowledge of the demand curve, is developed which is capable of confirming an existing economic case for subsidization.
ISSN: 00485829
DOI: 10.1023/A:1005019205780

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