5. Getting Prices Right

5.1 Competitive markets and other markets

In competitive markets there is really no pricing decision to be made. In a perfectly competitive market firms are price takers. If they set their prices too high they will get no business. If they set their prices too low they will get plenty of business, but won't cover their costs and will eventually go broke. Like the Three Bears they have only one option which is "just right", and that is the price set by Adam Smith's "invisible hand" - the interaction of supply and demand in a competitive market. This dismal constraint is well known to every farmer, sandwich shop owner and hairdresser who must take the "going price".

Governments, however, are usually involved where there has been some market failure, where the private sector either would not supply at all or, if it could, would not supply efficiently. In such situations governments become involved as providers, purchasers or regulators. In all three roles the government could have some role in setting the price to be paid by users, which can vary from free provision through to levels which are well above the cost of production.

The first aspect of market failure we'll look at is the situation of monopoly, and will then move on to look at other aspects of market failure, in particular the public good notions of excludability and rivalry.

5.2 Monopoly - the freedom to set prices

Governments, including local governments, are often monopoly providers. Water supply, waste disposal, trash collection, recreation reserves, libraries are all areas where governments have some level of monopoly provision. We tend to associate the term monopoly with exploitation - the robber barons of nineteenth century America. But there are other situations, including what is known as natural monopoly. That is, a market in which there is room for only one supplier.

The monopoly supplier has pricing latitude. At a high price there will still be some customers, and at a low price there will be more customers. It's not the "all or nothing" situation of competitive markets.

Price elasticity

An important concept in pricing is the economic notion of price elasticity. That is, the extent to which demand responds to price. For some goods, such as health care and gasoline, demand may be very unresponsive to price (price inelastic). For items of frivolous consumption, or for items with close substitutes, such as vintage port or umbrellas, demand might be very responsive to price (price elastic).

The extent to which a monopoly provider can exploit its market position depends on the price elasticity for the good or service provided. If price elasticity is low, then the monopolist has a wide degree of pricing latitude. If elasticity is high then the monopolist is in much the same situation as a supplier in a competitive market with many rivals.

In utilities, for example, gas suppliers are in competition with electricity providers; they do not have unbridled monopoly power; there is some degree of price elasticity in each market (but less in the combined energy market). In sewerage disposal, however, utilities are in a very powerful position, especially if they are able to enforce use of their service. (Governments often have the power to force consumption, a point to which we will return.)

Example of pricing choices

To illustrate the policy choices open to a government service provider it is perhaps easiest to work through an example.

A local government-owned ferry operating between the mainland and a small offshore island has an operating cost of $2000 per trip. The cost is quite independent of the number of passengers carried, up to its safe capacity of 500 persons. (More could crowd on board, and this is difficult to check.) The island has a number of rate paying residents and it also attracts a number of day trippers.

Passenger numbers per trip depend on the price. The relationship is shown below: In other words there is price elasticity.

Now there are a number of prices the government could set. But, before discussing the options, let's look at how different prices affect the bottom line of this business. Up to a point higher prices result in higher revenue, but past that point revenue falls off. (This is typical of the revenue function faced by monopoly suppliers.)

The local government has several options.

It could provide the ferry free, paying for its operating costs out of general revenue, or a levy on ratepayers on the island. The only trouble is that the ferry would be subject to overcrowding. In fact, the risk of overcrowding poses a serious cost in terms of risk to lives; this is a real cost, but it is not shown in accounting information.

It could set a price of $2.00 per trip, with a loss of $1000 per trip, to be funded by ratepayers. This would be ensure that the ferry is fully utilised. As we shall see, this is the economically optimum price.

It could set a price of $5.00 per trip, just breaking even. There would be no call on budgetary resources. But there would be 100 empty seats on each trip.

It could set a price of $7.00 a trip. The ferry could operate at a profit. There would be 190 empty seats on each trip. This, from the perspective of a finance authority, is the financially optimum price.

These options are typical of the policy options facing government service providers. What the government chooses to charge will depend on its objectives; there is no one optimum. An unfettered monopolist with an objective to maximize profits would settle on $7.00. But governments must take other considerations into account, especially the concept of deadweight loss, a concept to which we now turn before returning to the ferry example.

5.3 Deadweight loss

Those empty seats represent waste. Every time the ferry sails with empty seats there is a loss all around. If a price of $7.00 is set, then looking at the 190 excluded people there are:

40 people who would have paid $6 for a seat

50 people who would have paid $5 for a seat

20 people who would have paid $4 for a seat

30 people who would have paid $3 for a seat

50 people who would have paid $2 for a seat

That's a loss of $760 per voyage. It is called deadweight loss because no-one benefits. The $760 accrues neither to the operator or its customers. The ferry sails with empty seats which, at the margin, have cost nothing to provide, which people would have been willing to pay something for, but not as much as the price charged.

Even if a break-even price of $5.00 is set there is still deadweight loss, though it is less than it would have been at a price of $7.00. Those 100 people who had been willing to pay $2, $3 or $4 would still be excluded. The total deadweight loss is still $270 per voyage.

This hypothetical case illustrates the central problem in pricing in natural monopolies. Prices which result in maximum profit or even simply break-even result in underutilised capacity. That is capacity which people would have been willing to pay for, but not at the price charged by the operator. It would cost the operator nothing to fill that capacity, but the operator does not because to do so the price for all customers would have to come down.

Situations of deadweight loss abound where there are user charges in capital intensive projects. The M2 toll road in Sydney, for example, is underutilised, while traffic uses alternative routes to avoid the toll. Those vehicles are imposing costs of congestion and pollution in side roads, when there is more than adequate space on the freeway. Children stand outside a half-empty municipal pool, two dollar coins in hand, but they cannot afford the five dollar entry fee.

In such cases there is a conflict between financial and economic objectives. If financial objectives are strong, then governments will raise user charges and will accept the deadweight loss. If economic objectives dominate then governments will have to raise revenue through general taxes.

One approach which can sometimes be used to overcome the deadweight loss problem is price discrimination.

5.4 Price discrimination

Price discrimination is about charging different prices to different customers, for identical or essentially identical services. There are three degrees of price discrimination:⁽¹²⁾

• first degree being where the supplier sets a different price for each customer. This is used in markets and bazaars, where the stallholder sizes up each customer before trying to bargain a price;

• second degree where the supplier gets inside each individual's demand curve - We see this with stepped utility tariffs - so much for the first x units, so much less for the next y units.

For example, gas companies charge more for the first few units than for subsequent units. For the first few units demand is relatively price inelastic (that is, not particularly responsive to price). Gas is superior to electricity for rangetops, therefore demand is more inelastic than for subsequent units. For space and water heating, where electricity is a more viable contender, demand for gas is more price elastic.

This should not be confused with peak load pricing, such as is used by Telstra, which until recently had three tariffs during weekdays:

Peak 8 am to 6 pm

Intermediate 6 pm to 9 pm and lunchtime

Economy 9 pm to 8 am

The peak charge is possibly a reflection of the high marginal cost of using congested facilities. (These costs may be Telstra's, such as use of high cost reserve capacity at exchanges, or external costs, such as congestion costs of busy lines.) It is primarily peak load pricing. On the other hand the economy rate is almost certainly an example of pure price discrimination.

• third degree where the supplier segments the market with different charges to different identifiable groups of customers. It is common among airlines, for example, with student fares, or with lower fares for people willing to stay away for two weeks. Cinemas practice similar price discrimination. Sometimes price discrimination is subtle; for example a "deluxe" model car or appliance may have few extras, but a large price differential over the "standard".

Price discrimination can be practised only when the goods or services cannot be transferred. Otherwise there would be trading (arbitrage) from low price to high price consumers. For that reason its use is confined mainly to services and non-storable goods (electricity, gas). Also, it is not always acceptable to the community. People may accept three classes of travel on airplanes, but will not accept price discrimination on commuter trains.

Because of the benefits of price discrimination it is often hard to cost concessions such as pensioner fares on trains. Are they really concessions or just sensible commercial practices? After all, airlines and cinemas use price discrimination not out of a sense of community service, but out of financial self-interest. The distinction between community service obligations and price discrimination is very vague. Governments therefore try to define community service obligations so as to exclude concessions a commercial firm would make. This widens the latitude for interpreting the scope and cost of community service obligations.

5.5 Public goods - excludability and rivalry

Markets are like European cars. When they work they are magnificent; when they fail the results are inconvenient, expensive, and not always amenable to straightforward solutions.

The power of markets is their capacity to use price signals to allocate scarce resources efficiently. But what if there cannot be price signals? And what if the resources are not scarce - if one person's use and enjoyment does not take away from another person's use and enjoyment?

In this part we look at two properties of markets concerned with price signals and scarcity. In economists' terms these are the concepts of excludability and rivalry. This leads to a classification of markets based on these properties, integrating the theory of costing and pricing developed in the preceding chapters. Finally we look at a general normative approach to market failure.

Excludability

The main economic function of prices is to ration the supply of scarce goods to those who can offer scarce resources in exchange. Those who cannot pay, or who do not wish to pay, are excluded. That ensures resources are allocated to those who value them most.

Sometimes, however, non-payers cannot be excluded. It may simply be impractical to exclude non-payers. For example, most Australian national parks are vast areas with many points of entry; it would be absurdly expensive to put toll gates on every possible entrance. (By contrast, there is a small park south of Sydney with toll gates; because it has only two road entrances and is near a large population center it is excludable.) Local government recreation reserves generally have to be open to all comers. In such cases the transaction costs in collecting user fees are very high in comparison with the benefits from user charges.

In other cases it is technically impossible to exclude non-payers; it would be impossible to provide national defense to some people and communities and not to others, based on individual payments. In some cases the concept of non-excludability is another way of referring to positive externalities associated with production or consumption. When a business invests in research many of the benefits of that research enter the public domain, where non-payers cannot be excluded. A local initiative to control stormwater will benefit all in the flood prone area. In some cases services are non-excludable for moral reasons. Access to emergency wards and search and rescue services is based on such a principle. Sometimes there are mixed principles; access to immunisation is based both on moral grounds and on positive externalities.

When non-payers cannot be excluded private markets generally fail to provide, except perhaps in those rare cases where the providers can capture sufficient private benefits to be happy about letting other parties take the benefits for no return. For example, a large pastoral firm may find it economical to introduce new plant species, or new strains of fleas as myxomatosis vectors, accepting that neighboring properties will also gain the benefits. Such cases, however, are rare. In general non-excludability ensures markets will not develop, even though there are potential benefits to consumers and to producers, if only they could be paid. There is economic loss because desirable transactions cannot take place.

Rivalry

Rivalry is about scarcity. A good is rival if my use and enjoyment of a good detracts from your capacity to use and enjoy that good. If scarce resources are consumed in my using that good, then, by definition, it is rival. When there is no diminution of resources associated with one person's use of the good or service, it is non-rival.

For example, a beach may be non-rival; the Ninety Mile Beach on the Southern Ocean is a reasonable example; my use of it does not detract from another person's use of it. By contrast, however, Bondi Beach on a Saturday is definitely a rival good. Free to air broadcasting is a typical case of a non-rival good. In the ferry example above the unoccupied seats are non-rival, up to the point where there is a capacity limit.

The problem with non-rival goods is that if they are also excludable there can be deadweight loss. For example computer software, sound recordings and pharmaceuticals are essentially non-rival, in that once the fixed investment is made, the marginal cost of extra production is very small. If provision is left to unregulated private markets non-rival goods tend to be under-produced and over-priced, with all the problems of loss of consumer benefits, deadweight loss, and technical inefficiency associated with monopoly.

Public goods

When we combine the concepts of excludability and rivalry, we can develop a 2 x 2 matrix of classification, as shown below. The classifications are less rigid than such a matrix may imply. For example, goods can have non-rival characteristics because of low, but not necessarily zero, marginal cost; that is the case with most output of natural monopolies. Electricity and water supply are hard to classify unambiguously as "rival" or "non-rival". Goods may be only partially excludable; computer software is legally excludable, but piracy is technically easy. Within the matrix roads provide examples; depending on location and use roads can belong in all four quadrants.

To take each quadrant in turn, starting in the top left hand corner and working clockwise:

(1) Rival and Excludable

Here is where markets generally work well. Prices work to exclude non-payers, and rationing through prices allocates scarce resources. (Some special cases of market failure within this quadrant are provided in the next Section.). A toll road prone to congestion, such as Sydney's M4, provides an example; the marginal cost of another vehicle joining a stream of traffic is certainly not high. Tolls can be set, and non-payers can be excluded.

(2) Non-rival but Excludable.

In this quadrant markets, if left unregulated, will result in monopolization with deadweight loss. Public or private provision is possible, but whoever provides, there will need to be a degree of control to ensure allocative efficiency. When governments provide goods in this quadrant they are often tempted to take high profits to supplement their budgets; in other words they provide revenue-raising opportunities, without the burden of accountability imposed by taxation. The Hilmer Report has been most critical of governments for using utilities as backdoor taxation instruments in this way.⁽¹³⁾

An uncongested toll road is used as an example. For example the Sydney-Wollongong Turnpike is generally very quiet outside peak hour. The marginal cost of a lightweight vehicle using it at these times is next to nothing. The toll results in either a transfer to the owner (in that case the NSW Government), or in deadweight loss, if it puts people off using it and using the more winding Pacific Highway, with extra environmental and personal costs.

(3) Non-rival and Non-excludable

These are often called pure public goods. There is no substitute for public funding. Sometimes governments can contract the private sector to provide such goods, but responsibility for supply still falls on to the government.

(Free-to-air commercial television and radio is an interesting example. It has characteristics of a "pure" public good. Does this contradict the notion that the private market will not provide? No. Commercial broadcasters are allocated a scarce resource, the radio frequency spectrum; that scarcity gives a degree of monopoly value to their media, which is used as an avenue of promotion; entertainment is only a by-product of advertising. Compare this with unrestricted access to outdoor advertising, as occurs when local governments fail to implement adequate ordinances; advertising proliferates to the point that it loses all its value. Commercial broadcasting is not "free".)

The example of an uncongested open access road is used here. For a road like the Hume Highway toll gates would be impractical. Free provision does not result in economic waste, because the marginal cost of use is very low.

(4) Rival but Non-excludable

These goods present major public policy problems. Congestion, queues, and complaints about inadequate service confront the provider of such goods. When goods are provided free, and when there is a cost associated with their production, waste associated with excess consumption is quite likely. (Insurers refer to this phenomenon by the quaint term moral hazard.) The exception occurs when demand is quite price inelastic. For example, even though surgery is free under the national health system, most people do not seek surgery for the fun of it just because it's "free".

A congested open access road is used as an example. Roads like Parramatta road are severely congested, and there is no practical means of rationing use, except by letting congestion put people off. No reasonable amount of public expenditure can provide adequately. There are high budgetary and external costs associated with congestion. (Ironically, many environmental groups are opposed to the construction of urban toll roads, although they provide a realistic means of rationing through the price mechanism, with consequent environmental benefits.)

Where goods are non-excludable for technical reasons, changing technology may allow them to become excludable, For example, electronic road pricing technology has been implemented in Singapore without the need for expensive toll gates.

There is a tendency to excess demand for rival and non-excludable goods. Because, by definition, they are scarce (marginal cost is positive), excess supply generally means there is economic waste. The appropriate level of supply; therefore, needs to be set by techniques such as benefit-cost analysis.

Public funding and public provision

Much heat is wasted in political debate because of a lack of distinction between public funding and public provision. We are told, for example, that the private health care system is in danger of extinction because of the demise of private health insurance. (In reality, while the private funding system may wither away, the private provision of health care seems to have a well entrenched and accepted place in the system.)

For non-excludable goods there is little option other than public funding. That doesn't mean the government has to provide the service itself. It may contract the private sector to provide all or part of the goods or services involved, a point to which we turn in Chapter 7.

In the case of excludable but non-rival goods the private sector will often be very keen to fund and provide. By their nature, because of low variable costs, they often offer the opportunity of monopoly profits. If the private sector does provide, then a régime of price control and oversight will be necessary.

When it comes to asset sales governments face conflicting objectives. There is a short term budgetary desire to maximize the proceeds of the sale. This means, possibly, letting the sale go through with a very loose régime of price control. The sale price will be dependent on the present value of future earnings, and the higher the opportunity for monopoly profits, the higher the price the private bidder will offer. When privatization is driven by short term fiscal expediency it may involve selling the present value of future monopoly profits. There is no benefit to the community; prices may rise and there is the probability of deadweight loss.

Private provision with regulatory oversight is common in the USA, where power generation and telecommunications have been private for a long time, but not in Australia. (Here it will probably become more common with extensive privatization. One of our earliest initiatives is the authority Austel, to oversee telecommunications pricing.) Benchmark competition, where there is part public provision, has been a particularly Australian solution, with arrangements like the former two airline policy, Medibank Private, and government banking.

Toll goods and free riders

Sometimes communities get together to provide goods for their own collective use. These are not strictly public goods, as they are provided only for the benefit of a restricted group. For example, there is a levy on livestock transactions in Australia to finance meat research and promotion. Such goods are often known as toll goods; a group pays the toll for free access from there on.

Such arrangements often present free rider problems, as the goods are not always excludable. Non-payers often free-ride on these goods. For example, a network of navigation aids is provided for large regular public transport aircraft, and they are paid for by airlines out of their air navigation charges. Light aircraft operators, who pay much lower charges, can literally free ride on these navigation systems. They argue that they never required the systems; they were provided for another party (the large regular public transport operators). The marginal cost of using these services is zero, so they should not have to pay. The light aircraft operators say it's convenient to have access to them, but they never asked for them in the first place. There is logic in their argument; private markets normally do not force people to buy things they don't ask for.⁽¹⁴⁾ When governments institute user pay systems, they need to ask whether they are levying the beneficiaries of the system, or incidental, sometimes non-voluntary, users of the system. There is a story that in Stalin's time the KGB used to send families of political prisoners accounts for their accommodation. In Britain, in the 16th Century, political prisoners were expected to pay their executioners for the service rendered. Some user-pay systems are not far from this principle; for example the Australian Customs Services charges customs clearing fees on all imports, even though the beneficiaries of tariff protection are the industries enjoying tariff protection. In general, charging systems based on beneficiary pays are fairer than those based on user pays, but the transaction costs in tracing beneficiaries may be high.

Free rider situations carry an incentive to bluff. People may pretend that they really don't want a service, hoping someone else will pay for it. In local government it may appear perfectly logical for a group of people to come together to provide some collective good. But each will argue that he or she doesn't really want the good. For example, in the north of South Australia, the electricity authority offered to provide mains power to 12 farms and businesses in a remote region, provided they could raise the $300 000 among themselves. Even though each farm and business may have been willing to pay $25 000 for mains connection, the free rider incentive ensured that they didn't put their true preferences on the table, hoping other parties with more need would show a higher preference, and the proposal fell through. The common way around the free rider problem is to make consumption compulsory; that is why public goods such as street lighting are provided through general taxes such as rates. The local authority does not survey each street to find whether its residents want street lighting.

Another reason for compulsory provision of services existence of high positive externalities associated with use of the service (or high negative externalities associated with non-use). Sewerage connection and water supply both fall into this category. (Sometimes these are called merit goods.)

5.6 General market failure theory

The foregoing section covers market failure mainly under the headings of excludability and rivalry. There are other conditions which cause markets to fail, that is not to develop the benefits of competitive outcomes.⁽¹⁵⁾ Briefly, these are situations where, if pricing and allocation decisions were left to the "invisible hand" of the market there would not be the benefit of competition, with its attendant benefits of efficient production and competitive prices for consumers.

In these situations there needs to be a public policy in response. While market regulation normally falls to federal and state governments, there are roles for local government in areas such as hygiene.

A normative model is to apply a hierarchy of decisions, as in the figure alongside. This assumes that governments prefer to leave markets to operate when they can; in other words they are averse to intervention. (A different situation may exist in a centrally planned economy.)

At each step the benefits of action need to be weighed against the costs of that action. It may be that the market for pizzas is not perfectly competitive, but the cost of having a pizza regulatory agency would be far greater than the few benefits which it could achieve.

Regulatory costs are hard to measure. The easy part is to measure the costs incurred in the regulatory agency. There are also compliance costs - costs incurred in the regulated industry, such as licence fees, administrative time etc. Also regulations can lock an industry into a particular structure. Existing players can live with the regulatory régime, which tends to lock out other potential entrants with lower costs or innovative products. This is sometimes known as the theory of regulatory capture.⁽¹⁶⁾

Making markets work

That's the first level of government intervention. An unregulated market is not necessarily a competitive market. Regulations may be necessary to remove barriers to entry - impediments raised by existing operators in the market to suppress competition through maintaining restricted supply.

Trade practices legislation and enforcement is commonly used to prevent closed shops, collusion on prices and other uncompetitive behavior. In Australia this role is taken by the Australian Competition and Consumer Commission.

Information failure is common. Markets work well when consumers can easily judge for themselves the quality and value of products on the market. They may be able to judge quality before purchase, as most buyers can when buying fresh fruit. Or they may rely on experience for goods with low cost and short life, such as shampoo and T shirts.

When it comes to goods with complex qualities which are not immediately discernible to the consumer, information may be hard to obtain. A classic example is provided by the market for used cars, in which it is almost impossible for quality to command a premium. Left to their own devices such markets often fail to provide quality goods, and reach equilibrium at a low quality level. (For a complete treatment of this issue see George Akerlof's essay The Market for Lemons - Quality Uncertainty and the Market Mechanism.⁽¹⁷⁾) For products like food consumers have limited opportunities to judge purity and safety. For long-life products like life insurance one cannot detect a poorly performing product until it's too late.

To overcome such market failures regulations exist to provide consumer information (e.g. disclosure rules on investment products), to provide comparative data (e.g. fuel consumption guides), to require warranties (as in the Trade Practices Act and in used car warranty laws), and to provide mandatory standards, as with building and food codes.

Information has many public good characteristics, so tends to be under-provided in markets. Likewise with credibility; government regulation is often necessary to give consumers confidence in the market. Statutory warranties on used cars, for example, help consumers and producers by establishing credibility in a situation where it may otherwise be absent. That is why building inspection is important; those who buy houses and commercial buildings are rarely in a position to judge quality, and without regulation it would be possible to hide poor quality and cheap work, such as thin pipes or concrete without reinforcing.

Markets often fail to provide property rights. Developers of literary works, inventions, software, music, and pharmaceuticals, would not be able to sell their products at a reasonable price without protection against copying, as provided through patents and copyright. All these products have low unit cost, but high upfront fixed cost for the first producer, and a certain degree of non-excludability.

Sometimes markets never really reach a stable equilibrium, but prices swing around the equilibrium level. This is sometimes known as market failure through instability, and often results in calls for industry regulation to create stability. Such regulations often take the form of production quotas to stop production over-expanding and maintenance of stockpiles to regulate the flow of the commodity on to the market. Wool, tin, and other basic commodities have all, at various times, had such stabilization schemes, and the most extensive government stabilization interventions have been in countries' own currencies. In local government the timing of land release will have an effect on house prices; if done well it can help stabilize house prices; if done badly it can increase instability.

One of the most problematic cases of market failure occurs when there are many players, few barriers to entry, no overt collusion, but still no effective competition. This can occur in industries where firms consistently seek objectives other than profit maximization. These objectives may typically be growth or market share. Life insurance, banking, and health insurance all exhibit such characteristics.

Legitimacy in markets

A key assumption of economics is that supply and demand are independent functions. The consumer's demand function is independent of the supplier's supply function. The consumer is indifferent to the cost of production.

In reality, consumers are interested in the supply side of markets. Consumers seek fairness in market transactions; if they think they are being overcharged they will object, although they will not object to the same prices in a fair market.⁽¹⁸⁾ Commercially that means people will reduce their demand for the good or service if they feel ripped off; in extreme cases a boycott is possible. When it comes to government produced goods and services there is a political dimension to consumers' reactions. User-pay systems must be transparent, and costs have to be explained. Many sensible government initiatives in user charges fail politically because there is inadequate consultation and explanation.

Exercises

1. What is the market power of:

a supermarket in Campbelltown?

the general store in Wilcannia?

an earthmoving contractor in Brisbane?

an earthmoving contractor in Roma?

2. What would happen if, in a large new subdivision, the local government did nothing about water supply?

3. Why do governments charge for car parking?

4. Many local government libraries have public access computer terminals connected to the Internet. There are usually long queues waiting for a 15 or 20 minute time slot on these computers. Who would benefit and who would lose if a local government placed a charge on these services?

5. What may be the public reaction to placing a charge on an unserviced campsite which has become over-used?

6. In the early nineties the Commonwealth passed ownership (and maintenance) of county airports to local governments, suggesting that they could recover costs through user charges. What are some of the problems local governments face in collecting fees for airport use?

7. Why is local government (or any government for that matter) involved in the following?

regulation of food service outlets

environmental protection

fire control

building safety

swimming pools

roads and airports

libraries and halls

social programs

water supply

cemeteries

 

Notes

12. For this classification of price discrimination, I am indebted to Professor Jim McMaster, University of Canberra.

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