The Theory of Differential Rates

Abstract

I. Introductory. The economic foundation of differentiation, 682. — II. No natural tendency to uniformity in prices; uniformity sustained by the moral force of public opinion, 683. — III. The public the judge of homogeneity of goods or services, differences being the occasion for price differences; electrical examples, 686. — Homogeneity in relation to joint cost, 687. — Degrees of jointness; illustrations, 688. — IV. Jointcost v. monopoly as the basis of differentiation, 690. — Differentiation might develop largely under competition, 691. — Danger of arguing from a single “cause,” 693. — V. Wholesale discounts usually differential, and a differential element in retail price-fixing, 695. — VI. Deterioration and cost often in proportion to time rather than to use, 696. — Fixed-capital cost is of this nature, 698. — VII. Service the ultimate standard in judging differentiation, 699. — This principle opposed to rates lower than separable cost, as well as in favor of a differential treatment of general or joint-cost, 700. — Suggestiveness of electrical rates for impersonal methods, 701. — Public policy, 702.