ECONOMICS CONCEPT BEHIND THEINDIAN RAILWAY

PRICE ELASTICITY OF DEMAND:

Here the Demand of the railway have less changes as compared to change in price due to lack of substitute and competitor. And it is the most convenient for most of the people.

So here demand is in elastic.

ELASTICITY OF SUPPLY:

 Railway service is constant, Train travels to its designation as per its scheduled time, whatever the demand may be.

So supply is Constant and supply is perfectly inelastic

PRICE DISCRIMINATION:

Indian railway offers various compartment and seats. like AC, Sleeper, General etc. according to price. Here buyers are divided into different groups as per income and willing to pay.

INCOME ELASTICITY:

In some places where Airport is available, there Railway act as a inferior goods

Because as per the increase in income the demand will shifts toward Airlines for long journey.

ECONOMIES OF SCOPE:

Indian railway also provides catering service and online ticket booking facilities with its core service in order to reduce the cost and increasing the revenue with the same resources.