Long-Run Marginal Cost Pricing Based on Analytical Method for Revenue Reconciliation

摘要

Incremental and marginal approaches are two different types of methods to price the use of networks. The major difference between them is in the way they evaluate the costs imposed by network users. The former calculates network charges through simulation and the latter derives charges with a sensitivity-based analytical approach. Both charging models aim to send cost-reflective economic signals to customers, providing an economic climate for the cost-effective development of networks.