/biz/ - Business & Finance

2 questions*

>a
oil cartel lobbies against public transport
>b
lmao wut, thats not a question

>>16146319
>2. (a) Explain why public transport, such as buses and trains, might be under-
>provided in a market economy.

Because selling one car to everyone makes you more money than a few busses to multiple people

Look info the market failure of externalities

They’re underprovided because marginal analysis (profit optimization) does not account for social/environmental benefit and cost

>>16146319
(a) Explain why public transport, such as buses and trains, might be under-
provided in a market economy.
>Provision of public transport is underprovided by the public market due to private companies being unable to account for the positive externalities of public transport on the rest of the economy like public providers can.

(b) Discuss the view that imposing an indirect tax on gasoline (petrol) is the
most effective way of reducing the market failure caused by cars.

>A tax on gasoline does little to mitigate the market failures caused by car pollution due to the in elasticity of demand for gasoline. A more effective way of mitigating market failure of car pollution would be to tariff the sale of cars that use fuel inefficiently and subsidize cars that are either electric or have good fuel efficiency.


Thanks for the revision fren, gl on exams

>>16146319
hahaha we had these tests in ussr back when i was a kid
> explain why marxism is better for the workers
> explain what comrade so and so says about the exploiter class

>>16146423
No you didn't, larper

because public goods are subsidized which leads to market failure - so the supply costs curve basically gets shifted because of market inefficiencies leading to higher costs for suppliers

for b, the market failure is due to the externalities of personal automobiles (pollution) , basically social benefit is reduced by more than the personal benefit gained by driving the car. basically, tax gasoline = reduce the "consumption" of cars, bringing the demand down while the supply also drops down due to the indirect tax = net benefit increase

>>16146423
This. Keynesians are full of shit. They are masked commies

>>16146390
>>16146391
>Explain why public transport, such as buses and trains, might be under-
provided in a market economy
It's a trick question. They might never be underprovided in a market economy.

It's just that people get delusions and feel entitled to the same level of service everywhere regardless the cost. They then get the perception that these services are underprovided to them. Its the same way with health care hence there are social programs to provide both to the poor.

This problem can be attacked by a reductio ad absurdum. Is public transport really underprovided if there are just a couple of houses miles away from everything?? Is healtcare underprovided if a cure is possible but costs many many millions?

In economical profit terms the answer is something is under our oversupplied can be solved (though it's more complicated than one would think, because of second and third round effects and network effects) . If one introduces people's perceptions the question becomes a even more different kind of animal.

OP takes Meme degree. Wants /biz/ to write his shite essay. Why are you wasting yours & our time?

>>16146578
And to the
>muh positive externalities faggots
In public transport the water gets pretty murky pretty fucking quickly on these

At the end providing public transport below cost is just subsidising people's physical movement instead of choosing other technological based solutions to their problems.

>>16146319
HSC anon?