FIVE
ECONOMIC CONCEPTS THAT EFFECT INDIAN RAILWAYS
In each and every activity we are doing there is some underlying concepts of economies these are the few concepts that we can apply for the Indian railways. MONOPOLY: There are no other competitor only one seller but many buyers it is running by the government no other private sectors have permission to enter
PRICE DISCRIMINATION: Market/segment based price discrimination or 3rd degree of price discrimination. they give different price according to age group of the people like senior citizen ,disabled and different prices for children, below 3 years there is no need to buy tickets, employees of railway can get preferences to travel for free
ECONOMICS OF SCOPE: With common input and diversification leads to cost saving, railways are not only for the travel from one place to other, but also they are using them for transporting of good in the way of parcels services, special train services based on festivals
PEOPLE FACE TRADE OFF: A bus charges :Rs. 500 6 hrs
B train charges :Rs. 300 5 hrs
C Flight charges :Rs. 2000 2 hrs
In this situation in the less cost and maximum utility is railway, so we choose from railway, and the opportunity cost will be Rs.500, Rs.200.
RATIONAL PEOPLE THINK AT MARGIN:
If you book your tickets in sleeper sometime if the sleeper is full they will upgrade those tickets a/c, if a/c is vacant
In each and every activity we are doing there is some underlying concepts of economies these are the few concepts that we can apply for the Indian railways. MONOPOLY: There are no other competitor only one seller but many buyers it is running by the government no other private sectors have permission to enter
PRICE DISCRIMINATION: Market/segment based price discrimination or 3rd degree of price discrimination. they give different price according to age group of the people like senior citizen ,disabled and different prices for children, below 3 years there is no need to buy tickets, employees of railway can get preferences to travel for free
ECONOMICS OF SCOPE: With common input and diversification leads to cost saving, railways are not only for the travel from one place to other, but also they are using them for transporting of good in the way of parcels services, special train services based on festivals
PEOPLE FACE TRADE OFF: A bus charges :Rs. 500 6 hrs
B train charges :Rs. 300 5 hrs
C Flight charges :Rs. 2000 2 hrs
In this situation in the less cost and maximum utility is railway, so we choose from railway, and the opportunity cost will be Rs.500, Rs.200.
RATIONAL PEOPLE THINK AT MARGIN:
If you book your tickets in sleeper sometime if the sleeper is full they will upgrade those tickets a/c, if a/c is vacant
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