Fixed-margin system

A large number of parameters are involved in the choice of the corrosion protection system and the provision of the proteetion eurrent these are deseribed elsewhere (see Chapters 6 and 17). In partieular, for new locations of fixed production platforms, a knowledge of, for example, water temperature, oxygen content, conductivity, flow rate, chemical composition, biological activity, and abrasion by sand is useful. Measurements must be carried out at the sea location over a long period, so that an increased margin of safety can be calculated. 

Ramsey prices The theory on price structures in a monopoly developed by Ramsey affects those monopolies that produce more than one type of product. Ramsey showed that the best way to share fixed costs and cause minimal welfare losses was not the non-linear pricing system described above instead, the rule he proposed consisted in increasing prices above the marginal cost in an inverse proportion to demand elasticities. Ramsey prices are therefore linear prices that fulfil the condition that total revenue equals total costs, and moreover minimize welfare losses. 

The pharmaceutical industry produces social goods characterized by high fixed costs, high information and regulatory costs, and relatively low marginal costs of production. While the existing patent system provides for limited monopoly power to reward innovation, it concurrently restricts access to medicines. The industry must balance their... 

The EU ETS is a cap-and-trade system based primarily on the free allocation of a fixed amount of emission allowances to a set of covered installations. Companies can either use these allowances to cover the emissions resulting from the production of these installations or sell them to other companies that need additional allowances (Reinaud, 2005). Hence, for a company using an emission allowance, this represents an opportunity cost, regardless of whether the allowances are allocated for free or purchased at an auction or market. Therefore, in principle and in line with economic theory, a company is expected to add the costs of C02 emission allowances to its other marginal (variable) costs when making (short-term) production or trading decisions, even if the allowances are granted for free (Burtraw et al., 2002, 2005 Reinaud, 2003). 

System Solution. The shadow prices, Xj , are evaluated using Equation 10. Table IV lists the algebraic solution for the shadow prices (made very easy by choice of diagonalized constraint equations). The marginal prices 0 are evaluated with Equation 15. Again, the choice of fixed parameters and decision variables makes it possible to solve Equation 15 explicitly for each marginal price. Table V lists these expressions. 

The particular boundary conditions to be satisfied at the top and bottom surfaces of the fluid layer determine the form of the z dependence of the solution, i.e., the functions T z), n (z), etc. These are then used to locate the marginal state and thereby the critical point of the system, by recalling that the parametric space (defined by the parameters of the differential equations) contains both stable and imstable regions and hence a boundary between these two domains which is termed the marginal state or the state of neutral stability. Furthermore, in most stability problems, all the parameters of the system are fixed a priori except for one which is allowed to vary continuously over some range this one parameter then possesses some critical value that separates the stable from the unstable portions of the range. 

Usually combinations of these approaches are used. Fxamples can be found of systems in which the ex manufacturer/ex importer prices are regulated while the maximum margins allowed to wholesalers and pharmacists are simultaneously fixed. One also encounters systems in which only the pharmacy selling prices are regulated, while manufacturers, importers, wholesalers and pharmacies negotiate with each other on their charges and margins. 

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