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|Via Rail might have done a lot things to reduce its loses. Instead of servicing 400 cars they could have serviced half of them and|
|save a large amount of money. The serviced cars are efficient for the next 25 years hence they won’t be wasting money on them. Why|
|service all of them when using half the capacity anyway? The other thing the company might have done is to eradicate the number of|
|idle workers. Since layoffs were prohibited, the 8000 workers could have been offered any of the jobs onboard the trains, in the |
|maintenance yards that kept the trains in good running conditions and in the reservation centers. The 8000 were capable of working|
|these type of a job. Let them do something instead of paying them for nothing. The company might have operated for 7 days a week |
|and increase the fleet in summer since they were not meeting demand in summer. Make use of all the 400 cars get the 8000 idle |
|workers on board and start making profits. |
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|Market equilibrium at the context the are operating is inefficient because marginal cost exceeds marginal benefits and deadweight |
|loss is created. |
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|When demand increases, that is summer trains were always sold out and ten of thousands passengers were turned away every year, |
|then the demand curve is shifting rightwards. The quantity of trains demanded is greater than what VIA Rail is supplying. Demand |
|is exceeding supply hence the prices go up....