PLAN103 Lecture Notes - Lecture 9: Price Signal, Social Cost, Externality
Document Summary
More than just sending out a newsletter of what planners aim to do. Economic theory tells us that resources will be allocated efficiently when prices are equal to marginal costs. Need t0 take equity into account (planning for the public good) Accountability another reason we price things the way we do. The costs of providing roads to one additional subdivision or water pipes to one more housing unit. Prices for urban goods and services should reflect marginal costs as those costs vary with urban form factors such as location,density, loca context, and type of land use. Can"t charge same amount when costs vary between locations. When we misprice we charge them at the average, more is consumed because it costs the same. Charging at the margin most efficient, people will use less and pay the true price. More efficient than charging at the average cost. The cost to society as a whole of supplying one additional unit.
