🚀 go-pugleaf

In article <4pk4j9$l73@news1.t1.usa.pipeline.com>,
jguthrie@nyc.pipeline.com(James R. Guthrie) wrote:

> If all subsidies were removed for all modes, one might have a fair starting
> point; economic analysis without comparing subsidy is not analysis at all. 
>  
> Heck -- remove all subsidies, and we can retire  on our IRT stock <g>. 

I was referring to your basic economic analysis of natural monopolies: the
fixed costs are sufficiently large that at the equilibrium point of supply
and demand, costs are higher than revenues. Without subsidies or controls,
transit systems would move to the point of maximum net income: the point
where marginal cost and marginal revenue are equal, which is a much lower
and more expensive level of service than we generally want from our
transit systems. 

Essentially, we (as a society) recognize that mass transit brings a lot of
social benefits and we subsidize it to receive those benefits.

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John Whiteside | Boston -> Washington DC 
jwhitesi@concentric.net
http://www.shore.net/~johnw/
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