Natural Monopoly Municipal Utility Pricing Model

Municipal public utilities have the following characteristics in common: monopolistic, regional, public interest. Public utilities, as a whole, are not well operated by the market, and therefore always taken charge of by the government strictly, and the price of its product and service is set by the government rather than by the market. In the past, public utilities is not opened to the state-owned enterprise and because the government used to be both the Shareholder and the regulator, so it cannot be well operated by the market theory. at the same time the government's financial is difficult to continuously undertake the high sum of the foundation facilities input , hence the government release the restrict of the investment, and promote market-oriented reform. To develop the function of the price leverage, the past price that once strictly restricted and given much welfare by the government now gradually becomes reasonable to meet the need of the cost and profits of the businesses.Many problems appeared in the process of the market-oriented reform, particularly the price is still set by planned the list price mode under the planned economy system, not suitable to the market development. Because much changing of policy, the price return to have no completely distribute to flick its resources to install, encourage and tie the business enterprise, have already made the business enterprise deeply suffer to affect.This text tries to research the relation between the public utilities and government, popular (consumer) of structure and form for game theory, absorb experience at price mode of America and Britain, bring up the price model and the problem that business enterprise should be attention.With the foundation of study sample, businesses should be enhanced social duty by oneself, increase service level, give up the short-term behavior, and avoid the transitional gains trap. Supported by the government and the people, the balanced price system is beneficial to the development of businesses in the future.