4 ms·
That’s not what I mean.
by baron816 3y ago
That’s not what I mean.
- qwytw 3y agoYou can't imagine this could ever be profitable though?
- baron816 3y agoI just mean that when you lower prices, more people will buy it, and they’ll buy more of it. That can more than offset the lower margin on a per item purchase. If your train has 200 seats, it’s better to sell 200 tickets at $65 per ticket than it is to sell 100 at $100 per ticket.
- qwytw 3y agoOf course, but if operating a train costs you $10 per seat and you start charging $5 it will never break even.. And the article says: "€49 a month ‘Deutschlandticket’ has led to a 25 per cent rise in passengers on national railway company Deutsche Bahn's regional services" and a daily (regional) ticket costs about €20-50 depending on area. I mean obviously it might very well be worth doing this for other reasons but somebody will have to subsidize the lost revenue for various transport companies.
- hyperhopper 3y agoAnybody that has ever taken a 101 economics class knows this is true. Look up elasticity of demand.
- qwytw 3y ago> Anybody that has ever taken a 101 economics class knows this is true. The first 20 minutes of one? i.e. before arriving at concept of 'marginal cost' also I doubt demand for public transport is necessarily that elastic, short term anyway. As the article says traffic for regional trains only increased by 25% despite the price decreasing much more than that (e.g. a single day ticket previously cost 20-50 euros depending on area).
- constantcrying 3y agoIt can not be. Unless you think that transport agencies suddenly figured out how to make everything work for half the price. The government just subsidizes the losses. That is the explicit plan, profit is not intended to happen.