Abstract
This paper corrects and extends Baiman (2001) by deriving valid conditions that determine when equity factors outweigh efficiency factors in the progressive Ramsey pricing, or "Progressive Social Pricing Rule," derived in that paper. When these conditions hold, that rule becomes a rule for "progressive socialpricing in the usual sense" of lower-income consumers getting relatively lower prices. When price elasticities are directly correlated with income, this becomes a "direct-elasticity" pricing rule.
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