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Submitted by Alain Locussol on

I suppose that in these water scarce cities demand for water is somehow managed through pricing: ideally water should be priced at long-run marginal cost (LRMC), i.e. the cost of producing and distributing an incremental quantity of water once existing capacity is fully used. Any idea on how LRMC compares in each case with the average revenue per m3 (or gallon) of water sold (which hopefully covers O&M costs, depreciate fixed assets and yield a return on assets sufficient to service the long-term debt and remunerate equity invested)?