"Effects of Pricing a 'Free' Good": Reply

The only in this discussion is the failure of Anderson and Bonsor to rigorously apply the basic concepts outlined in their article [1974] and ours [Huszar and Seckler 1974]. While it is easy to see how this error could arise, it is important to correct it, as they say, before it spreads. There are three points to cover: (1) the expropriative as opposed to the rationing function of price; (2) violation of the implicit assumption of perfect knowledge; and (3) the compensation test.