A Simple Explanation For A Successful Phd Ft

Brainstorming tips for a week

Thus, and disintegration of vertically integrated municipal companies, and control over a payment for use of the networks belonging to them promote the competition in productions, adjoining natural monopolies.

In the USA the restriction of rate of return which is carried out on the basis of an extra charge on costs was the practice of regulation of natural monopoly dominating until recently. The companies were allowed to gain the net posttax income in known limits.

Distinctive feature of such branches - use of network structures (pipeline transport, systems of water supply, a power line, railway tracks, etc.). The similar organization of production demands the big capital investments not available to small and average investors, and provides considerable constant costs. Therefore a necessary condition of their existence is possibility of economy at scales, achievement of such outputs at which there is a sufficient decrease in a specific unit cost. Besides, the assets embodied in the paved railroads telephone communication lines, pipelines are, etc. exclusively specific, have a limited framework of applicability and cannot be easily reoriented on other markets. It defines efficiency of concentration of release at the only producer.

The approved tariff usually works until the company does not address with the requirement about its revision that usually occurs in case the rate of return becomes insufficient. And the enterprises have to get permission not only to increase of tariffs, but also to change of their structure, and in some cases even for decrease.

Besides, the effective competition for an entrance on the market can be organized not in any exclusive market. In particular it is limited by the high size and irretrievable character of costs for participation in competition which therefore in whole or in part should be compensated to the state.

Thirdly, simplification of process of regulation for the companies and regulators. The company can change the level and structure of tariffs on the set formula, and the regulator should not participate in wearisome procedures of revision of the prices and detailed consideration of the investment program.

Regulation of activity of the companies directly in the markets of natural and exclusive branches happens according to two differing models. At the heart of one of them - regulation of rate of return, another - regulation of tariffs.

Effective corporate and joint-stock management assumes that owners of the enterprises possess big interest in orientation of management of the company to maximizing profitability and size of the share capital under existing conditions of regulation. Of course, privatization has a certain impact on corporate and joint-stock management. However both after full privatization, and before its carrying out korporativno joint-stock management can become more effective only on condition of involvement of strategic investors by means of sale or transfer of big equity stakes to those persons or the organizations who will be interested in rigid control of work of managers.

The described models have much in common. Both of them reflect process of the bargaining between the company and the regulator. The principles of creation of systems of regulation are identical - both there, and here definition of the income of the company sufficient for its development is taken as a basis. The difference that in one case by means of tariffs the rate of return is controlled, in other it is fixed only on "entrance" (that is minimization of expenses on which the profit is estimated is stimulated).

In view of the fact that natural monopolies, as a rule, make production necessary for normal functioning of the majority of the enterprises and the making considerable part of the resources consumed by them, non-payments for production of natural monopolies develop into crisis of non-payments in scales of economy of the state. Distribution of non-payments - result of price discrimination of the natural monopolies and other economic structures having influence in the market and which are not constrained in the activity by the regulating influence of the state.