Effects of Metering Urban Water

do not impose marginal monetary costs on the consumer, because he does not incur incremental out-of-pocket costs when additional units of water are consumed. This does not necesarily imply that the marginal costs of consuming water under a flat rate price structure will be zero. For example, the incremental nonmonetary costs in time and effort that are associated with opening and closing faucets will be positive, but very small. Therefore, satisfaction will be optimized when the last unit of water consumed yields incremental benefits that are close to