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Impossible because of the restrictions imposed by the given method of pricing. InSuch cases manufacture can take place only at following to the politician
Such are advantages of the decision of Hotellinga - Lernera in comparison with an establishment
The prices on average costs. But the lacks considered in the previous section,
Also are saved. They should be compared. The first advantage of the decision - - Lernera in comparison with pricing on average costs in that, That it improves a limiting consumer choice. But this advantage Decreases and can be brought to nothing a damage from increase in the income Taxes. The second advantage that at readiness of consumers to pay Full costs the government can begin manufacture which would be
It is impossible at pricing on average costs. But it is necessary to remember that
It is that policy who assigns an estimation problem to the government Individual demand so, assumes the restrictions considered Above. Not in all cases when manufacture is possible at pricing on
To average costs, this manufacture should be conducted in general. The government,
Which with too big errors estimates demand of individuals, can is easy To bring to nothing all possible good results of such policy. At Pricing on average costs any things by which it is necessary to do, Can be, will not become, but simultaneously we will avoid some errors in
Manufacture which become inevitable as soon as we will follow to the politician
- - Lernera. As I have noted earlier, I do not believe in a rationality of assumptions
About ability of the government correctly to estimate individual demand in Situations when all prices are based on limiting costs. At last, a policy - - Lernera assumes redistribution of riches and incomes, Which as I have already noted, it will be difficult to modify at absence
That rational choice considering limiting costs. And after all just on it Also policy Hotellinga - Lernera is directed. Discussion in this section shows that results of comparison
Pricings on the basis of average costs with the decision of Hotellinga - Lernera not
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