If the average cost of transporting a passenger on the bus from Peterborough to Toronto is $35, it would be irrational for the railroad to allow any passenger to ride for less than $35.

Question

Quizplus · Accepted Answer

The railroad might have different cost structures, economies of scale, or strategies (such as attracting more customers with lower prices) that could make it rational to offer prices below $35.

If the Average Cost of Transporting a Passenger on the Bus