Unformatted text preview: when prices fall. However in specific cases it has been argued that PD is efficient and beneficial to society. For example 2 nd degree PD allows a monopoly transport company to overcharge in the city, but provide cheap travel for villages and far flung areas. If Pd is not allowed then the surplus of city dwellers mat rise, but transport facilities for villages may have to be withdrawn as the lower uniform prices cant sustain operations in these areas. The welfare of consumers in villages falls. So in some cases an end to PD can be an efficiency loss for the whole system....
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- Spring '10
- Economics, producer, Degree PD, rises. Producer surplus, lower uniform prices, monopoly transport company