By C. H. Sharp (auth.)
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Beesley studied the choice between public transport modes and between public transport and private car for the journey to work of Ministry of Transport employees [27]. Quarmby's study was of the choice between car and public transport for car owners travelling to work in central Leeds [56]. t Discriminant analysis was also used in the LGORU study, which dealt with modal split for work journeys in Liverpool, Manchester, Leicester and Leeds [46]. Lee and Dalvi's study dealt with the choice between different public transport modes [46].
The optimum price for a transport undertaking with production discontinuities and falling costs (both features likely to be found in the real world) is therefore likely to be between long- and short-run marginal cost. It will equal long-run marginal cost only if the demand curve happens to intersect the long-run cost curve exactly at a point where the capacity produced by the last unit ofinvestment will all be used. Short-run marginal cost represents a minimum point below which price should never fall.
This report has been severely criticised, mainly because the railway's figures were based on the assumption that the cost of building high-capacity roads could be reducedby over 70 per cent if they did not have to carry heavy lorries. This assumption is generally agreed to be false. A Ministry of Transport study of track costs published in 1968 estimated that, in 1965-6, cars paid charges amounting to 2·1 times the costs of providing and maintaining the roads they used. Comparable cost-revenue ratios for light vans and heavy goods vehicles were 1:3·3 and 1:1·8 respectively.