Optimal transit Prices under Increasing Returns to Scale and a Loss Constraint

Optimal transit Prices under Increasing Returns to Scale and a Loss Constraint

Welfare loss might be reduced by requiring total revenues from all units in an urban transport system to meet a proportion of total costs, instead of applying the constraint to each unit separately. This may need an agency to administer prices and cross-subsidisation. Prices are calculated for the East Bay Area of the San Francisco Bay Area.

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