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Pricing in Practice

  • Michael G. Webb
Chapter
Part of the Macmillan Studies in Economics book series (STEC)

Abstract

In a number of countries at least some public enterprises attempt to relate their prices to marginal costs. Probably the best-known example of this is the Tarif Vèrt of Electricité de France ([33], [42] ch. 6), which was introduced in 1956 for supplies to high-voltage (industrial) consumers. The costs to the company of supplying electricity vary from hour to hour during the day, from day to day, and seasonally. The Tarif Vèrt is an attempt to impart this cost information to consumers. To this end the year is divided into five subperiods, three in the ‘winter’ and two in the ‘summer’. The winter periods are known as the ‘peak’, ‘full-use’ and ‘slack’ periods; the last two terms are also used to describe the two summer periods.The ‘peak’ period lasts for two hours in the afternoon of the days Monday to Saturday inclusive for the months November to February inclusive. The winter ‘full-use’ period covers the same days but for the months September to February inclusive, and applies to all units sold between 06.00 and 22.00 hours each day with the exception of the units sold at the ‘peak’ rate. The ‘slack’ period is simply the remainder of the winter-period hours.

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Copyright information

© Michael G. Webb 1976

Authors and Affiliations

  • Michael G. Webb
    • 1
  1. 1.University of YorkUK

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