ABSTRACT
Under commercial operation, a starting point in pricing policy is to establish links between prices and costs. An operator seeking to break even or make a small profit is taken as the initial case, with some simple average costing approaches described. However, provided that revenue at least exceeds the variable, or escapable, cost associated with a particular facility, it will be worth retaining, at any rate in the short-to-medium run. Simple average cost-price relationships should therefore be considered only as a guide to the principles involved.
