Public-Interest Type Results concerning the Single Regulated Multiservice Firm and Multifirm Alternatives

An extension is presented of certain previous optimization results concerning the capabilities, under certain conditions, of the single regulated multiservice firm relative to multifirm alternatives. The extension enables account to be taken of the important possibility (not studied earlier) that the multifirm alternative, as well as the single multiservice firm, can provide each of the services at several different levels of quality and at different prices. In the case of the multifirm alternative, here any subset of the firms is permitted to collectively provide any service at a price and level of quality. It is proved, for example, that (under the type of assumptions used earlier) the single multiservice firm can choose prices and indices of quality so that its prices (or, if it wishes, its quantity-weighted-sums, each sum for one service, of "quality-to-price ratios") are Pareto optimal.