Urban transit systems, especially those with rail systems, typically experience
Chapter 11, Problem 6(choose chapter or problem)
Urban transit systems, especially those with rail systems, typically experience significant economies of scale in operation. Consider the transit system whose data is given in the Table 11.4. Note that the quantity is in millions of riders. Demand: Quantity 1 2 3 4 5 6 7 8 9 10 Price 10 9 8 7 6 5 4 3 2 1 Marginal Reve nue 10 8 6 4 2 0 2 4 6 8 Table 11.4 Costs: Marginal Cost 9 6 5 3 2 3 4 5 7 10 Average Cost 9 7.5 6.7 5.8 5 4.7 4.6 4.6 4.9 5.4 Table 11.4 Draw the demand, marginal revenue, marginal cost, and average cost curves. Do they have the normal shapes?
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