Confusing fixed and variable costs under Ramsey regulation

Autores
Urbiztondo, Santiago
Año de publicación
1997
Idioma
inglés
Tipo de recurso
documento de trabajo
Estado
versión enviada
Descripción
Ramsey regulation, in the context of tariff rebalancing, is analyzed when the regulator is not fully informed about the cost structure of the firm. It is shown that even if the estimated relation between variable costs of the two goods produced is correct, errors regarding the composition of a given total cost between fixed and variable elements result in: (i) the price of the good with a higher (lower) elasticity of demand decreases (increases) as the estimated fixed cost is higher; and (ii) whatever mistake is made, i.e., under or over estimating fixed costs, the profits obtained by the regulated firm are lower than intended.
Departamento de Economía
Materia
Ciencias Económicas
costos fijos
análisis de costes
costos variables
economía
Nivel de accesibilidad
acceso abierto
Condiciones de uso
http://creativecommons.org/licenses/by/3.0/
Repositorio
SEDICI (UNLP)
Institución
Universidad Nacional de La Plata
OAI Identificador
oai:sedici.unlp.edu.ar:10915/3517

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spelling Confusing fixed and variable costs under Ramsey regulationUrbiztondo, SantiagoCiencias Económicascostos fijosanálisis de costescostos variableseconomíaRamsey regulation, in the context of tariff rebalancing, is analyzed when the regulator is not fully informed about the cost structure of the firm. It is shown that even if the estimated relation between variable costs of the two goods produced is correct, errors regarding the composition of a given total cost between fixed and variable elements result in: (i) the price of the good with a higher (lower) elasticity of demand decreases (increases) as the estimated fixed cost is higher; and (ii) whatever mistake is made, i.e., under or over estimating fixed costs, the profits obtained by the regulated firm are lower than intended.Departamento de Economía1997-10info:eu-repo/semantics/workingPaperinfo:eu-repo/semantics/submittedVersionDocumento de trabajohttp://purl.org/coar/resource_type/c_8042info:ar-repo/semantics/documentoDeTrabajoapplication/pdfhttp://sedici.unlp.edu.ar/handle/10915/3517enginfo:eu-repo/semantics/altIdentifier/url/http://www.depeco.econo.unlp.edu.ar/doctrab/doc3.pdfinfo:eu-repo/semantics/altIdentifier/issn/1853-3930info:eu-repo/semantics/openAccesshttp://creativecommons.org/licenses/by/3.0/Creative Commons Attribution 3.0 Unported (CC BY 3.0)reponame:SEDICI (UNLP)instname:Universidad Nacional de La Platainstacron:UNLP2025-10-22T16:30:47Zoai:sedici.unlp.edu.ar:10915/3517Institucionalhttp://sedici.unlp.edu.ar/Universidad públicaNo correspondehttp://sedici.unlp.edu.ar/oai/snrdalira@sedici.unlp.edu.arArgentinaNo correspondeNo correspondeNo correspondeopendoar:13292025-10-22 16:30:47.727SEDICI (UNLP) - Universidad Nacional de La Platafalse
dc.title.none.fl_str_mv Confusing fixed and variable costs under Ramsey regulation
title Confusing fixed and variable costs under Ramsey regulation
spellingShingle Confusing fixed and variable costs under Ramsey regulation
Urbiztondo, Santiago
Ciencias Económicas
costos fijos
análisis de costes
costos variables
economía
title_short Confusing fixed and variable costs under Ramsey regulation
title_full Confusing fixed and variable costs under Ramsey regulation
title_fullStr Confusing fixed and variable costs under Ramsey regulation
title_full_unstemmed Confusing fixed and variable costs under Ramsey regulation
title_sort Confusing fixed and variable costs under Ramsey regulation
dc.creator.none.fl_str_mv Urbiztondo, Santiago
author Urbiztondo, Santiago
author_facet Urbiztondo, Santiago
author_role author
dc.subject.none.fl_str_mv Ciencias Económicas
costos fijos
análisis de costes
costos variables
economía
topic Ciencias Económicas
costos fijos
análisis de costes
costos variables
economía
dc.description.none.fl_txt_mv Ramsey regulation, in the context of tariff rebalancing, is analyzed when the regulator is not fully informed about the cost structure of the firm. It is shown that even if the estimated relation between variable costs of the two goods produced is correct, errors regarding the composition of a given total cost between fixed and variable elements result in: (i) the price of the good with a higher (lower) elasticity of demand decreases (increases) as the estimated fixed cost is higher; and (ii) whatever mistake is made, i.e., under or over estimating fixed costs, the profits obtained by the regulated firm are lower than intended.
Departamento de Economía
description Ramsey regulation, in the context of tariff rebalancing, is analyzed when the regulator is not fully informed about the cost structure of the firm. It is shown that even if the estimated relation between variable costs of the two goods produced is correct, errors regarding the composition of a given total cost between fixed and variable elements result in: (i) the price of the good with a higher (lower) elasticity of demand decreases (increases) as the estimated fixed cost is higher; and (ii) whatever mistake is made, i.e., under or over estimating fixed costs, the profits obtained by the regulated firm are lower than intended.
publishDate 1997
dc.date.none.fl_str_mv 1997-10
dc.type.none.fl_str_mv info:eu-repo/semantics/workingPaper
info:eu-repo/semantics/submittedVersion
Documento de trabajo
http://purl.org/coar/resource_type/c_8042
info:ar-repo/semantics/documentoDeTrabajo
format workingPaper
status_str submittedVersion
dc.identifier.none.fl_str_mv http://sedici.unlp.edu.ar/handle/10915/3517
url http://sedici.unlp.edu.ar/handle/10915/3517
dc.language.none.fl_str_mv eng
language eng
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info:eu-repo/semantics/altIdentifier/issn/1853-3930
dc.rights.none.fl_str_mv info:eu-repo/semantics/openAccess
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Creative Commons Attribution 3.0 Unported (CC BY 3.0)
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Creative Commons Attribution 3.0 Unported (CC BY 3.0)
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