73:, political economics author and statistician and Finnish parliamentarian, cross-subsidy leads to welfare losses for passengers in urban areas, arguing that even if there are reasons for subsidizing public transport in sparsely populated areas, it is better to provide subsidy from general taxation rather than have passengers in more densely populated areas provide subsidy by directing profits from reinvestment in these services. This results in higher fares, lower staff wages, lower frequencies and older vehicles on popular services, reduce the attractiveness of services and spreading
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Some economists argue that cross subsidization in state owned enterprises increases the likelihood of anticompetitive practices such as predatory pricing. They argue that regulators, such as U.S. postal regulators, should monitor a state monopoly's cost allocation to ensure that revenue generated in
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of unprofitable services to profitable services and can result in cuts to profitable services to cover expected and unexpected losses. Cross-subsidy puts the financial burden for unprofitable services on passengers who often have the least ability to pay. He also notes that in sparsely populated
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control over marketing agricultural exports are sometimes alleged to cross subsidize, but lack of transparency in their operations makes it difficult, if not impossible, to determine if that is the case.
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among others are cross-subsidized. In some cases, there is a universal price ceiling for the services, leading to cross subsidies benefiting the areas for which the costs of provision are high.
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David E. M. Sappington & J. Gregory Sidak, Incentives for
Anticompetitive Behavior by Public Enterprises, 22 REV. INDUS. ORG. 183, 184 (2003),
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J. Gregory Sidak, Maximizing the Postal
Service's Profits from Competitive Products, 11 J. COMP. L. & ECON. 617 (2015),
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is the practice of charging higher prices to one type of consumers to artificially lower prices for another group.
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https://www.criterioneconomics.com/incentives-for-anticompetitive-behavior-by-public-enterprises.html
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Report for
Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition
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the monopolized market is not used to lessen competition in competitive markets.
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areas, cars are often more ecologically friendly than buses.
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27:Higher prices to fund lower prices elsewhere
207:United States Department of Agriculture
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131:Bussiliikenne alistetaan kilpailulle
115:VR hinnoittelee yhä pahemmin väärin
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173: This article incorporates
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190:Congressional Research Service
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57:, electricity tariffs, and
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35:State trading enterprises
175:public domain material
45:In many countries,
31:Cross subsidization
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51:broadband accesses
47:telecommunications
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65:Criticism
201:Category
86:See also
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97:Subsidy
92:Feebate
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