week 1: introduction into cost and prices Flashcards
what are the output of transport
moving people or some goods from some origin to a destination
what does
C(q,w)=w’x*(q)
tells us
minimum cost of producing q units of output, given prices anf transfpormation of tech
how do you define AC
AC(q)=C(q)/q
- AC of producing one unit oof output when q units are produced
how do you define MC
MC(q)=dC/dq
- cost of producing an additional unit of output when q units are produced
where is cost minimize
when AC = MC
Suppose qis the quantity of apples produced by a firm and C(q)is the cost of producing qapples. The marginal cost of an apple i…
The cost of producing an additional apple. It is obtained as the derivative of C(q)with respect to q
what is intermediate outputs
operator provides a certain number of seats (bus-kms) in a given hour.
Operator: bus driver
what are final outputs
Quanitity of trips taken (passengers moved)
resulted from combination of intermediate output and user input
real-life example of final outputs
total passenger trips made
Cant be controlled by the opertator
There are 18 buses running in London at 11pm but no one enters during this period
Final ouputs generates value for users and revenue to the operator
Cost of intermediate inputs
- costs which drivers would incur
- what Operators would splash money on a day to day basis
Cost of roads and vehicles
Cost of labour
Cost of energy
Private cost for the final user
Combine intermediate outputs with their input (time)
What are the costs of travel/trips
capital cost of road and maintenance
private user cost of car travel
car, fuel and time
what is the definition of price
what the user has to pay to acquire/use the good
why is price=cost not ture
price = MC + markup
- price doesnt always represent the cost to society
what is the generalized price
This is money + time (main components)
Definition; sum of user costs plus monetary charges imposed on the user (taxes and tolls included
GP = P.UC + tolls + taxes
what are social costs
sum of all cost the society sustain for a transport trip Socialcosts = PUC+OC+EC EC = external cost OC= operator cost PUC = private user cost
what are external cost
cost which the user or operator impose on sosciety, but doesnt internalize (consider)
give 3 examples of external costs
Congestion: extra time cost for user, due to more intensice use of infrastructure
environmental cost: noise, water pollution and noise
space: OC of space
what is the output of transport measured as?
passenger KMS ot ton kms
