What is cross-subsidy charges?

What is cross-subsidy charges?

Cross subsidization is the practice of charging higher prices to one type of consumers to artificially lower prices for another group.

What is cross subsidization example?

Example of Cross Subsidization If each one of them pays $25, Jeff is cross subsidizing Harry for $5, since Jeff is paying $25 for a meal that cost $20, while Harry is paying $25 for a meal that cost $30.

What is cross electricity?

In context of electricity, it is the difference between the applicable average tariff of a consumer category and the cost of supply to that consumer category.

How is cross-subsidy surcharge calculated?

“Surcharge formula: S= T – [C/ (1-L/100) + D+ R] Where, S is the surcharge T is the tariff payable by the relevant category of consumers, including reflecting the Renewable Purchase Obligation C is the per unit weighted average cost of power purchase by the Licensee, including meeting the Renewable Purchase Obligation …

What is cross-subsidy Upsc?

Cross subsidization is defined as the variation in the price policy for 2 sets of buyers or it can be stated as When a marketer charges higher prices to a group of consumers in order to subsidise lower prices for another group, it is referred to as cross-subsidisation. This is a relevant topic for IAS exam aspirants.

What is cross subsidization in health care?

Cross subsidies are. empirically measured as the difference between the community rate and a fair. actuarial premium, which is estimated by a multivariate regression model. These. estimates indicate that community rating may unintentionally cross subsidize certain groups of individuals at the expense of others.

What do you know about subsidy?

A subsidy is a direct or indirect payment to individuals or firms, usually in the form of a cash payment from the government or a targeted tax cut. In economic theory, subsidies can be used to offset market failures and externalities to achieve greater economic efficiency.

What is cross subsidy surcharge in Open Access?

b) Cross Subsidy Surcharge: Cross-subsidy surcharge shall be payable by all intra- State open access consumers except those persons who have established captive generating station and are availing open access for carrying the electricity to a destination for their own use.

What is a surcharge rate?

A surcharge is an extra fee, charge, or tax that is added on to the cost of a good or service, beyond the initially quoted price. Often, a surcharge is added to an existing tax and is not included in the stated price of the good or service.

What is cross-subsidy surcharge in Open Access?

Do hospitals cross subsidize?

Cross-subsidization of individually unprofitable service lines within hospitals is not transparent from an accounting perspective, and therefore direct observation of this practice and its extent is not possible.