ABSTRACT
Much of the energy policy debate of direct relevance to consumers has revolved around two very different issues. The first concerns economic efficiency and the basic argument is that the price should indicate to each consumer the true cost to the economy of using more energy. Schurr and coauthors (1979) state that the “right” price is a key component of an effective energy policy and necessary to ensure the efficient use of energy, energy conservation, and an adequate future supply. They argue that the “right” price is the marginal value of additional energy as it is represented by the price of imported oil.
