A mathematical model of dilemma of controlling under a non-elastic demand for water consumption
P. I. Anpilogova, L. V. Naumenkob
a Kiev National University of Construction and Architecture
b Public Corporation «Joint Stock Company «Kyivvodokanal»
Annotation: There are considered economic-mathematical models of developing a scheme of controlling a natural monopoly under decreasing the volumes of water consumption. There has been done an analysis of methods of determining water consumption prices. The analysis has shown, that the main drawback of the method «expenses plus» is creation of conditions when an enterprise is not interested in reducing operational expenses and needs an increase of investment expenses of a more necessary level demands. Water consumption being reduced, such an approach will necessarily result in an unreasonable increase of the price. The mathematical researches presented have shown that the only way of controlling the price at a fixed profit level is a reduction of variable expenses due to the introduction resource-saving technologies. The methods of controlling the natural monopoly existing now do not solve this problem in full measure. There is suggested a scheme «expenses plus resource economy» which creates such conditions for controlling natural monopoly at which reservation and increase of a real profit is carried out due to the creation of interest at the enterprise in resource saving.
Keywords: price, dilemma of controlling, water supply, natural monopoly.
Pages: 165-170.
Link for citation: Anpilogov, P. I.; Naumenko, L. V. A mathematical model of dilemma of controlling under a non-elastic demand for water consumption. – Text : electronic. – In: Economics of Civil Engineering and Municipal Economy. – 2007. – Vol. 3, N 4. – Р. 165-170. – URL: https://donnasa.ru/publish_house/journals/esgh/2007-4/01_anpilogov_naumenko.pdf (date of access: 01.09.2024). (in Russian)
Vol. 3, N 4 (2007)Journal: Economics of Civil Engineering and Municipal Economy
Publish house: Donbas National Academy of Civil Engineering and Architecture