EconomicsNotes

  Nationalisation means the process whereby a business is taken into government ownership and is run by a public authority. Between 1945 and 1985, many British companies were nationalised ones. Governments, starting consistently in the 1980s, sold these companies to the private sector with the aim of changing companies which required public funding into ones that generated tax revenue. In addition, attempts were made to create or emulate markets in the areas where the firms operated, often by breaking the firms up into a number of new ones, so as to introduce choice for customers, competition, and dynamic efficiency. A trade-off was accepted in which formerly public companies made private profits, often accompanied by subsidy, for shareholders, but where shareholders invested in infrastructure and capital. This was accompanied by government regulation of price and services. It was the case, however, that many industries were originally natural monopolies. This is a situation in w...

What are the benefits of price discrimination to UK railway passengers?     Price discrimination is where the same service is sold at different prices to the same or different consumers. It is divided into first-, second-, or third-degree discrimination.   For price discrimination to work, companies must have knowledge of demand, the ability to stop purchasers re-selling items or services at cheap prices to others, and the company should have market power to be able to set prices. Ideally, they should also be able to stop customer comparing prices and informing each other of significant differences.     In first degree discrimination, the price is tailored to the customer and their elasticity. All consumer surplus is captured. Such a system involves charging whatever a particular consumer can pay for a seat and is built into the way in which seats become more expensive the nearer to the time of travel a consumer seeks to purchase them. For railway comp...