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Competitive Significance of Substitutes for Public Utility Service
B. N. Behling
The American Economic Review
Vol. 27, No. 1 (Mar., 1937), pp. 17-30
Published by: American Economic Association
Stable URL: http://www.jstor.org/stable/1803814
Page Count: 14
You can always find the topics here!Topics: Public utilities, Economic competition, Monopolistic competition, Market competition, Monopoly, Regulatory competition, Prices, Transportation, Service industries
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Within the last decade two conflicting lines of thought bearing on the economics of public utility enterprises have appeared. It has been claimed that these industries no longer are essentially monopolistic because of new manifestations of competition; simultaneously, efforts have been made to develop a systematic theory of monopolistic competition. The application of the latter doctrine should shed some light on the former contention. Public utility services are, in most cases,sharply differentiated from substitutes in important respects; and this means that while markets may overlap, normal competition is chiefly at the borderlines. In the public utility industries, wherein important technological changes and shifts in demand have been characteristic, perfunctory analysis may result in confusing competition with the process of economic displacement or exclusion. It maybe questioned, also, whether the seeming prevalence of close competition is not traceable to monopolistic policies; artificial market relationships may easily be mistaken for competition.
The American Economic Review © 1937 American Economic Association