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120-733: The New York, New Haven and Hartford Railroad ( reporting mark NH ), commonly known as The Consolidated , or simply as the New Haven , was a railroad that operated principally in the New England region of the United States from 1872 to 1968. Founded by the merger of the New York and New Haven and Hartford and New Haven railroads, the company had near-total dominance of railroad traffic in Southern New England for

240-405: A " de jure monopoly") is a form of coercive monopoly , in which a government grants exclusive privilege to a private individual or company to be the sole provider of a commodity. Monopoly may be granted explicitly, as when potential competitors are excluded from the market by a specific law , or implicitly, such as when the requirements of an administrative regulation can only be fulfilled by

360-695: A 2-digit code indicating the vehicle's register country . The registered keeper of a vehicle is now indicated by a separate Vehicle Keeper Marking (VKM), usually the name of the owning company or an abbreviation thereof, which must be registered with the Intergovernmental Organisation for International Carriage by Rail (OTIF) and the European Union Agency for Railways (ERA) and which is unique throughout Europe and parts of Asia and Northern Africa. The VKM must be between two and five letters in length and can use any of

480-642: A Mikado-type engine that was typical to the New Haven. The name of the Hartford Yard Goats Minor League Baseball team reflects the old New York, New Haven and Hartford railroad history and the design of its logo is based on the original NYNHH logo. The team plays in downtown Hartford at Dunkin' Donuts Park , which is adjacent to Hartford Yard , originally built by NYNHH. NH introduced ideas for passenger rail travel, including early use of restaurant and parlor cars in

600-509: A PC market are price takers. The price is set by the interaction of demand and supply at the market or aggregate level. Individual companies simply take the price determined by the market and produce that quantity of output that maximizes the company's profits. If a PC company attempted to increase prices above the market level all its customers would abandon the company and purchase at the market price from other companies. A monopoly has considerable although not unlimited market power. A monopoly has

720-739: A boarding pass before boarding an airplane. Most travelers assume that this practice is strictly a matter of security. However, a primary purpose in requesting photographic identification is to confirm that the ticket purchaser is the person about to board the airplane and not someone who has repurchased the ticket from a discount buyer. The inability to prevent resale is the largest obstacle to successful price discrimination. Companies have, however, developed numerous methods to prevent resale. For example, universities require that students show identification before entering sporting events. Governments may make it illegal to resell tickets or products. In Boston, Red Sox baseball tickets can only be resold legally to

840-598: A company cannot charge more than the market price. Any market structure characterized by a downward sloping demand curve has market power – monopoly, monopolistic competition and oligopoly. The only market structure that has no market power is perfect competition. A company wishing to practice price discrimination must be able to prevent middlemen or brokers from acquiring the consumer surplus for themselves. The company accomplishes this by preventing or limiting resale. Many methods are used to prevent resale. For instance, persons are required to show photographic identification and

960-641: A complete monopoly of transportation in southern New England, purchasing other railroads and steamship and trolley lines. More than 100 independent railroads eventually became part of the system before and during these years, reaching 2,131 miles at its 1929 peak. Substantial improvements to the system were made during the Mellen years, including electrification between New York and New Haven . Morgan and Mellen went further and attempted to acquire or neutralize competition from other railroads in New England, including

1080-426: A consumer's tax return has information that can be used to charge customers based on an estimate of their ability to pay. In second degree price discrimination or quantity discrimination customers are charged different prices based on how much they buy. There is a single price schedule for all consumers but the prices vary depending on the quantity of the good bought. The theory of second degree price discrimination

1200-438: A consumer's willingness to pay is rarely available. Sellers tend to rely on secondary information such as where a person lives (postal codes); for example, catalog retailers can use mail high-priced catalogs to high-income postal codes. First degree price discrimination most frequently occurs in regard to professional services or in transactions involving direct buyer-seller negotiations. For example, an accountant who has prepared

1320-549: A customer's willingness to buy a good is difficult. Asking consumers directly is fruitless: consumers do not know, and to the extent they do they are reluctant to share that information with marketers. The two main methods for determining willingness to buy are observation of personal characteristics and consumer actions. As noted information about where a person lives (postal codes), how the person dresses, what kind of car he or she drives, occupation, and income and spending patterns can be helpful in classifying. The price of monopoly

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1440-492: A different price. Third degree price discrimination is the most prevalent type. There are three conditions that must be present for a company to engage in successful price discrimination. First, the company must have market power. Second, the company must be able to sort customers according to their willingness to pay for the good. Third, the firm must be able to prevent resell. A company must have some degree of market power to practice price discrimination. Without market power

1560-415: A government. In many jurisdictions, competition laws restrict monopolies due to government concerns over potential adverse effects. Holding a dominant position or a monopoly in a market is often not illegal in itself; however, certain categories of behavior can be considered abusive and therefore incur legal sanctions when business is dominant. A government-granted monopoly or legal monopoly , by contrast,

1680-433: A higher price than P ∗ {\displaystyle P^{*}} and those who will not pay P ∗ {\displaystyle P^{*}} but would buy at a lower price. A price discrimination strategy is to charge less price sensitive buyers a higher price and the more price sensitive buyers a lower price. Thus additional revenue is generated from two sources. The basic problem

1800-464: A hyphen. Some examples: When a vehicle is sold it will not normally be transferred to another register. The Czech railways bought large numbers of coaches from ÖBB. The number remained the same but the VKM changed from A-ÖBB to A-ČD. The UIC introduced a uniform numbering system for their members based on a 12-digit number, largely known as UIC number . The third and fourth digit of the number indicated

1920-503: A linear demand curve. Assume that the inverse demand curve is of the form x = a − b y {\displaystyle x=a-by} . Then the total revenue curve is TR = a y − b y 2 {\displaystyle {\text{TR}}=ay-by^{2}} and the marginal revenue curve is thus MR = a − 2 b y {\displaystyle {\text{MR}}=a-2by} . From this several things are evident. First,

2040-464: A little their definition of a good, allowing for more flexibility in the identification of substitute goods. A monopoly has at least one of these five characteristics: Market power can be estimated with Lerner index . High profit margins might not correspond to a high rate of return or monopoly prices and might represent risk premiums . Monopolies derive their market power from barriers to entry – circumstances that prevent or greatly impede

2160-416: A maximum value then continuously decreases until total revenue is again zero. Total revenue has its maximum value when the slope of the total revenue function is zero. The slope of the total revenue function is marginal revenue. So the revenue maximizing quantity and price occur when MR = 0 {\displaystyle {\text{MR}}=0} . For example, assume that the monopoly's demand function

2280-410: A monopolist to increase its profit by charging higher prices for identical goods to those who are willing or able to pay more. For example, most economic textbooks cost more in the United States than in developing countries like Ethiopia . In this case, the publisher is using its government-granted copyright monopoly to price discriminate between the generally wealthier American economics students and

2400-495: A monopoly should be distinguished from a cartel (a form of oligopoly), in which several providers act together to coordinate services, prices or sale of goods. Monopolies, monopsonies and oligopolies are all situations in which one or a few entities have market power and therefore interact with their customers (monopoly or oligopoly), or suppliers (monopsony) in ways that distort the market. Monopolies can be formed by mergers and integrations, form naturally , or be established by

2520-602: A monopoly. But the legislature approved a second attempt just two years later, and the New York, New Haven and Hartford Railroad was formed on July 24, 1872. The newly-combined railroad owned a main line from New York City to Springfield via New Haven and Hartford, and also reached New London, Connecticut via a lease of the Shore Line Railway (leased in 1870 by the New York and New Haven Railroad). The company later leased more lines and systems, eventually forming

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2640-509: A monopoly. Often, a natural monopoly is the outcome of an initial rivalry between several competitors. An early market entrant that takes advantage of the cost structure and can expand rapidly can exclude smaller companies from entering and can drive or buy out other companies. A natural monopoly suffers from the same inefficiencies as any other monopoly. Left to its own devices, a profit-seeking natural monopoly will produce where marginal revenue equals marginal costs. Regulation of natural monopolies

2760-447: A more elastic demand for movies than do young adults because they generally have more free time. Thus theaters will offer discount tickets to seniors. Assume that by a uniform pricing system the monopolist would sell five units at a price of $ 10 per unit. Assume that his marginal cost is $ 5 per unit. Total revenue would be $ 50, total costs would be $ 25 and profits would be $ 25. If the monopolist practiced price discrimination he would sell

2880-496: A more price inelastic demand and a relatively lesser price to the group with a more elastic demand. Examples of third degree price discrimination abound. Airlines charge higher prices to business travelers than to vacation travelers. The reasoning is that the demand curve for a vacation traveler is relatively elastic while the demand curve for a business traveler is relatively inelastic. Any determinant of price elasticity of demand can be used to segment markets. For example, seniors have

3000-437: A one- to six-digit number. This information is used to uniquely identify every such rail car or locomotive, thus allowing it to be tracked by the railroad it is traveling over, which shares the information with other railroads and customers. In multinational registries, a code indicating the home country may also be included. The Association of American Railroads (AAR) assigns marks to all carriers, under authority granted by

3120-452: A particular thing, a lack of viable substitute goods , and the possibility of a high monopoly price well above the seller's marginal cost that leads to a high monopoly profit . The verb monopolise or monopolize refers to the process by which a company gains the ability to raise prices or exclude competitors. In economics, a monopoly is a single seller. In law, a monopoly is a business entity that has significant market power, that is,

3240-421: A perfectly elastic demand curve meaning that total revenue is proportional to output. Thus the total revenue curve for a competitive company is a ray with a slope equal to the market price. A competitive company can sell all the output it desires at the market price. For a monopoly to increase sales it must reduce price. Thus the total revenue curve for a monopoly is a parabola that begins at the origin and reaches

3360-531: A potential competitor's ability to compete in a market. There are three major types of barriers to entry: economic, legal, and deliberate. In addition to barriers to entry and competition, barriers to exit may be a source of market power. Barriers to exit are market conditions that make it difficult or expensive for a company to end its involvement with a market. High liquidation costs are a primary barrier to exiting. Market exit and shutdown are sometimes separate events. The decision of whether to shut down or operate

3480-700: A predecessor of the CNW, from which the UP inherited it. Similarly, during the breakup of Conrail , the long-retired marks of the Pennsylvania Railroad (PRR) and New York Central Railroad (NYC) were temporarily brought back and applied to much of Conrail's fleet to signify which cars and locomotives were to go to CSX (all cars labeled NYC) and which to Norfolk Southern (all cars labeled PRR). Some of these cars still retain their temporary NYC marks. Because of its size, this list has been split into subpages based on

3600-477: A price increase, price elasticity tends to increase, and in the optimum case above it will be greater than one for most customers. A company maximizes profit by selling where marginal revenue equals marginal cost. A company that does not engage in price discrimination will charge the profit maximizing price, P ∗ {\displaystyle P^{*}} , to all its customers. In such circumstances there are customers who would be willing to pay

3720-424: A single agent or entrepreneur, the optimal decision is to equate the marginal cost and marginal revenue of production. Nonetheless, a pure monopoly can – unlike a competitive company – alter the market price for its own convenience: a decrease of production results in a higher price. In the economics' jargon, it is said that pure monopolies have "a downward-sloping demand". An important consequence of such behaviour

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3840-402: A substitute. Contrary to common misconception , monopolists do not try to sell items for the highest possible price, nor do they try to maximize profit per unit, but rather they try to maximize total profit. A natural monopoly is an organization that experiences increasing returns to scale over the relevant range of output and relatively high fixed costs. A natural monopoly occurs where

3960-787: A virtual monopoly in New England south of the Boston and Albany Railroad . In 1882, the railroad leased the Boston, New York and Airline Railroad, the last railroad in New Haven not controlled by the NYNH&;H. This new acquisition gave the New Haven Railroad a connection to Willimantic, Connecticut . Two more companies, the Naugatuck Railroad and the Connecticut Valley Railroad , were leased by

4080-448: A wide swath from Boston to New York City. This quest for monopoly angered Progressive Era reformers, alienated public opinion, raised the cost of acquiring other companies and increased the railroad's construction costs. The company's debt soared from $ 14 million in 1903 to $ 242 million in 1913, while the advent of automobiles, trucks and buses reduced its profits. Also in 1913, the federal government filed an antitrust lawsuit that forced

4200-406: Is P = 50 − 2 Q {\displaystyle P=50-2Q} . The total revenue function would be TR = 50 Q − 2 Q 2 {\displaystyle {\text{TR}}=50Q-2Q^{2}} and marginal revenue would be 50 − 4 Q {\displaystyle 50-4Q} . Setting marginal revenue equal to zero we have So

4320-502: Is a consumer is willing to buy only a certain quantity of a good at a given price. Companies know that consumer's willingness to buy decreases as more units are purchased. The task for the seller is to identify these price points and to reduce the price once one is reached in the hope that a reduced price will trigger additional purchases from the consumer. For example, sell in unit blocks rather than individual units. In third degree price discrimination or multi-market price discrimination

4440-420: Is a structure in which a single supplier produces and sells a given product or service. If there is a single seller in a certain market and there are no close substitutes for the product, then the market structure is that of a "pure monopoly". Sometimes, there are many sellers in an industry or there exist many close substitutes for the goods being produced, but nevertheless, companies retain some market power. This

4560-400: Is a theoretical construct, advances in information technology and micromarketing may bring it closer to the realm of possibility. Partial price discrimination can cause some customers who are inappropriately pooled with high price customers to be excluded from the market. For example, a poor student in the U.S. might be excluded from purchasing an economics textbook at the U.S. price, which

4680-681: Is defined by the total gains from trade, the monopoly setting is less efficient than perfect competition. It is often argued that monopolies tend to become less efficient and less innovative over time, becoming "complacent", because they do not have to be efficient or innovative to compete in the marketplace. Sometimes this very loss of psychological efficiency can increase a potential competitor's value enough to overcome market entry barriers, or provide incentive for research and investment into new alternatives. The theory of contestable markets argues that in some circumstances (private) monopolies are forced to behave as if there were competition because of

4800-417: Is important information for one to remember when considering the monopoly model diagram (and its associated conclusions) displayed here. The result that monopoly prices are higher, and production output lesser, than a competitive company follow from a requirement that the monopoly not charge different prices for different customers. That is, the monopoly is restricted from engaging in price discrimination (this

4920-401: Is known as the "revolution in monopoly theory". A monopolist can extract only one premium, and getting into complementary markets does not pay. That is, the total profits a monopolist could earn if it sought to leverage its monopoly in one market by monopolizing a complementary market are equal to the extra profits it could earn anyway by charging more for the monopoly product itself. However,

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5040-487: Is not affected by exit barriers. A company will shut down if the price falls below minimum average variable costs. While monopoly and perfect competition represent the extremes of market structures there is some similarity. The cost functions are the same. Both monopolies and perfectly competitive (PC) companies minimize cost and maximize profit. The shutdown decisions are the same. Both are assumed to have perfectly competitive factors markets. There are distinctions; some of

5160-400: Is not perfect. Regulators must estimate average costs. Companies have a reduced incentive to lower costs. Regulation of this type has not been limited to natural monopolies. Average-cost pricing does also have some disadvantages. By setting price equal to the intersection of the demand curve and the average total cost curve, the firm's output is allocatively inefficient as the price is less than

5280-528: Is painted in McGinnis-era livery, while the iconic "NH" logo appears on everything from rolling stock, station signage, to tourism materials for the city of New Haven itself. The Connecticut Department of Transportation has painted its diesel commuter rail locomotives used on the non-electrified Danbury and Waterbury Metro-North branches, as well as its Shore Line East operation, in the "McGinnis Scheme," composed of white, black, and orange-red stripes with

5400-400: Is problematic. Fragmenting such monopolies is by definition inefficient. The most frequently used methods dealing with natural monopolies are government regulations and public ownership. Government regulation generally consists of regulatory commissions charged with the principal duty of setting prices. Natural monopolies are synonymous with what is called "single-unit enterprise", a term which

5520-446: Is sanctioned by the state, often to provide an incentive to invest in a risky venture or enrich a domestic interest group . Patents , copyrights , and trademarks are sometimes used as examples of government-granted monopolies. The government may also reserve the venture for itself, thus forming a government monopoly , for example with a state-owned company . Monopolies may be naturally occurring due to limited competition because

5640-448: Is termed first degree price discrimination , such that all customers are charged the same amount). If the monopoly were permitted to charge individualised prices (this is termed third degree price discrimination ), the quantity produced, and the price charged to the marginal customer, would be identical to that of a competitive company, thus eliminating the deadweight loss ; however, all gains from trade (social welfare) would accrue to

5760-409: Is termed "monopolistic competition", whereas in an oligopoly , the companies interact strategically. In general, the main results from this theory compare the price-fixing methods across market structures, analyze the effect of a certain structure on welfare, and vary technological or demand assumptions in order to assess the consequences for an abstract model of society. Most economic textbooks follow

5880-621: Is that typically a monopoly selects a higher price and lesser quantity of output than a price-taking company; again, less is available at a higher price. A monopoly chooses that price that maximizes the difference between total revenue and total cost. The basic markup rule (as measured by the Lerner index ) can be expressed as P − M C P = − 1 E d {\displaystyle {\frac {P-MC}{P}}={\frac {-1}{E_{d}}}} , where E d {\displaystyle E_{d}}

6000-560: Is the only market form in which price discrimination would be impossible (a perfectly competitive company has a perfectly elastic demand curve and has no market power). There are three forms of price discrimination. First degree price discrimination charges each consumer the maximum price the consumer is willing to pay. Second degree price discrimination involves quantity discounts. Third degree price discrimination involves grouping consumers according to willingness to pay as measured by their price elasticities of demand and charging each group

6120-535: Is the price elasticity of demand the firm faces. The markup rules indicate that the ratio between profit margin and the price is inversely proportional to the price elasticity of demand. The implication of the rule is that the more elastic the demand for the product the less pricing power the monopoly has. Market power is the ability to increase the product's price above marginal cost without losing all customers. Perfectly competitive (PC) companies have zero market power when it comes to setting prices. All companies of

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6240-517: Is to identify customers by their willingness to pay. The purpose of price discrimination is to transfer consumer surplus to the producer. Consumer surplus is the difference between the value of a good to a consumer and the price the consumer must pay in the market to purchase it. Price discrimination is not limited to monopolies. Market power is a company's ability to increase prices without losing all its customers. Any company that has market power can engage in price discrimination. Perfect competition

6360-441: Is upon every occasion the highest which can be got. The natural price, or the price of free competition, on the contrary, is the lowest which can be taken, not upon every occasion indeed, but for any considerable time together. The one is upon every occasion the highest which can be squeezed out of the buyers, or which it is supposed they will consent to give; the other is the lowest which the sellers can commonly afford to take, and at

6480-564: The Metro-North Railroad ’s New Haven Line and Shore Line East , providing commuter service from Manhattan’s Grand Central Terminal as far eastward as New London, Connecticut. The New Haven Line is coded red on Metro-North timetables and system maps, a nod to the red livery used by the New Haven for the last decade of its history. MBTA 's Providence/Stoughton Line provides commuter service between Providence and South Station in Boston. Amtrak took over passenger service on

6600-475: The New Haven–Springfield Line in 1976, and was joined by the state of Connecticut's Hartford Line in 2018. On August 28, 1980, American Financial Enterprises, Inc., acquired the remaining assets of the New York, New Haven and Hartford Railroad Company when the plan for reorganization was approved by the court and the company was reorganized. This brought to an end the 108-year corporate history of

6720-720: The New York Central 's Boston and Albany Railroad, the Rutland Railroad , the Maine Central Railroad , and the Boston and Maine Railroad . But the Morgan-Mellen expansion left the company overextended and financially weak. In 1914, 21 directors and ex-directors of the railroad were indicted for "conspiracy to monopolize interstate commerce by acquiring the control of practically all the transportation facilities of New England." In 1925,

6840-508: The New York and New Haven Railroad , which opened in 1848 between its namesake cities. The two companies had a history of cooperation; for a time, they jointly leased the New Haven and Northampton Railroad and coordinated their steamship services with each other. An initial merger attempt between the two in 1870 was rejected by the Connecticut General Assembly , largely over fears that the merged railroad would form

6960-557: The U.S. Surface Transportation Board , Transport Canada , and Mexican Government. Railinc , a subsidiary of the AAR, maintains the active reporting marks for the North American rail industry. Under current practice, the first letter must match the initial letter of the railroad name. As it also acts as a Standard Carrier Alpha Code , the reporting mark cannot conflict with codes in use by other nonrail carriers. Marks ending with

7080-513: The 26 letters of the Latin alphabet . Diacritical marks may also be used, but they are ignored in data processing (for example, Ö is treated as though it is O ). The VKM is preceded by the code for the country (according to the alphabetical coding system described in Appendix 4 to the 1949 convention and Article 45(4) of the 1968 convention on road traffic), where the vehicle is registered and

7200-692: The Boston-area portion of the Old Colony Division. The twelve-year reorganization resulted in "eight Supreme Court decisions, fourteen circuit court decisions, five district court decisions, and eleven ICC reports." The railroad emerged in September 1947 under a reorganization plan approved in federal court, without the vast majority of its previous non-railroad interests, and with a number of unprofitable passenger operations on marginal branches replaced with bus service. In 1948,

7320-555: The Bowl. On November 21, 1922, for example, such trains carried more than 50,000 passengers. "There is nothing which can be compared with the New Haven's football movement except a record of one of the mass-movements incidental to the European war," one observer wrote in 1916. Reporting mark In North America , the mark, which consists of an alphabetic code of two to four letters, is stenciled on each piece of equipment, along with

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7440-649: The Bronx for the New York, New Haven, and Hartford Railroad. An executive at the railroad said the contract was awarded to avoid friction with New York City’s Tammany Hall political machine. In response to this contract, the New York State Legislature amended the city's charter so that franchise-awarding power was removed from the city council and given to the Board of Estimate and Apportionment, which only became defunct in 1989. Morgan and Mellen achieved

7560-590: The Connecticut Public Utilities Commission in February 1960 if the company's survival was in imminent danger, the New Haven's comptroller replied, "Yes, even with the best of management". Continuing financial problems forced the New Haven into bankruptcy on July 7, 1961, and federal court judge Robert P. Anderson assumed trusteeship . The railroad reported it would have only $ 9,262,000 in funds to cover expenses of $ 33,480,000 at

7680-607: The NH to divest its trolley systems. The line became bankrupt in 1935. It emerged from bankruptcy, albeit reduced in scope, in 1947, only to go bankrupt again in 1961. In 1969, its rail assets were merged with the Penn Central system, formed a year earlier by the merger of the New York Central Railroad and Pennsylvania Railroad . Already a poorly conceived merger, Penn Central went bankrupt in 1970, becoming

7800-483: The NH was purchased by PC, which operated the train. Other passenger trains: Beginning November 21, 1914, the railroad operated special trains to bring football fans to and from the new Yale Bowl stadium in New Haven. Passengers rode extra trains from Springfield, Boston, and especially New York to the New Haven Union Station, where they transferred to trolleys for the 2-mile (3.2 km) ride to

7920-479: The New Haven in 1887. With these two leases, the New Haven was in control of 10 of the 22 railroads in Connecticut at the time. Around the beginning of the 20th century, New York investors led by J. P. Morgan gained control, and in 1903 installed Charles S. Mellen as President. Charles Francis Murphy's New York Contracting and Trucking company was awarded a $ 6 million contract in 1904 to build rail lines in

8040-534: The Providence & Worcester, Bay Colony, Boston & Maine, Connecticut Central, Pioneer Valley, Housatonic and Connecticut Southern railroads. Those lines still operated by Conrail in 1999 became part of CSX Transportation as the result of the breakup of the Conrail system. The state of Connecticut frequently alludes to the New Haven in its modern transportation projects; much of the state’s commuter equipment

8160-682: The VKM BLS. Example for an "Einheitswagen" delivered in 1957: In the United Kingdom, prior to nationalisation, wagons owned by the major railways were marked with codes of two to four letters, these codes normally being the initials of the railway concerned; for example, wagons of the Great Western Railway were marked "G W"; those of the London, Midland and Scottish Railway were marked "L M S", etc. The codes were agreed between

8280-541: The acquiring company discontinues the name or mark of the acquired company, the discontinued mark is referred to as a "fallen flag" railway. Occasionally, long-disused marks are suddenly revived by the companies which now own them. For example, in recent years, the Union Pacific Railroad has begun to use the mark CMO on newly built covered hoppers, gondolas and five-bay coal hoppers. CMO originally belonged to Chicago, St. Paul, Minneapolis and Omaha Railway ,

8400-415: The authentic script-lettering insignia of the original "New York, New Haven and Hartford" railroad on the tenders of its resident steam locomotives, 2-8-0 Consolidation type Number 97 and 2-8-2 Mikado type number 40. There is a third steam locomotive in restoration to running order; a Chinese SY-class Mikado, formerly known as the 1658, it is being renumbered and painted as New Haven 3025, and is to be based on

8520-403: The average cost of production "declines throughout the relevant range of product demand". The relevant range of product demand is where the average cost curve is below the demand curve. When this situation occurs, it is always more efficient for one large company to supply the market than multiple smaller companies; in fact, absent government intervention in such markets, will naturally evolve into

8640-433: The brash Patrick B. McGinnis led a proxy fight against incumbent president Frederic C. "Buck" Dumaine Jr. , vowing to return more of the company's profit to shareholders. McGinnis won control of the railroad and appointed Arthur V. McGowan, a longtime acquaintance, Vice President. McGinnis attempted to accomplish many of his financial goals by deferring all but the most essential maintenance. Under McGinnis, Knoll Associates

8760-467: The case that at the profit-maximizing quantity MR and MC are less than price, which further implies that a monopoly produces less quantity at a higher price than if the market were perfectly competitive. The fact that a monopoly has a downward-sloping demand curve means that the relationship between total revenue and output for a monopoly is much different from that of competitive companies. Total revenue equals price times quantity. A competitive company has

8880-632: The company operated 644 locomotives, 1,602 passenger cars and 8,796 freight cars on 1,581 miles of track. After 1951, both freight and passenger service lost money. The earlier expansion had left NH with a network of low-density branch lines that could not pay their own maintenance and operating costs. The freight business was short-haul, requiring switching costs that could not be recovered in short-distance rates. They operated major commuter train services in New York and Boston (as well as New Haven, Hartford and Providence), but these had always lost money; though heavily patronized, these services operated only during

9000-1020: The equipment used in these services. This may also apply to commuter rail, for example Metrolink in Southern California uses the reporting mark SCAX because the equipment is owned by the Southern California Regional Rail Authority —which owns the Metrolink system—even though it is operated by Amtrak. This is why the reporting mark for CSX Transportation , which is an operating railroad, is CSXT instead of CSX. Private (non-common carrier) freight car owners in Mexico were issued, up until around 1990, reporting marks ending in two X's, possibly to signify that their cars followed different regulations (such as bans on friction bearing trucks) than their American counterparts and so their viability for interchange service

9120-531: The first half of the 20th century. Beginning in the 1890s and accelerating in 1903, New York banker J. P. Morgan sought to monopolize New England transportation by arranging the NH's acquisition of 50 companies, including other railroads and steamship lines, and building a network of electrified trolley lines that provided interurban transportation for all of southern New England. By 1912, the New Haven operated more than 2,000 miles (3,200 km) of track, with 120,000 employees, and practically monopolized traffic in

9240-448: The first letter of the reporting mark: A railway vehicle must be registered in the relevant state's National Vehicle Register (NVR), as part of which process it will be assigned a 12-digit European Vehicle Number (EVN). The EVN schema is essentially the same as that used by the earlier UIC numbering systems for tractive vehicles and wagons , except that it replaces the 2-digit vehicle owner's code (see § Europe 1964 to 2005 ) with

9360-407: The first unit for $ 17 the second unit for $ 14 and so on which is listed in the table below. Total revenue would be $ 55, his total cost would be $ 25 and his profit would be $ 30. Several things are worth noting. The monopolist acquires all the consumer surplus and eliminates practically all the deadweight loss because he is willing to sell to anyone who is willing to pay at least the marginal cost. Thus

9480-400: The form of price control is necessary as it helped efficient market. To reduce prices and increase output, regulators often use average cost pricing. By average cost pricing, the price and quantity are determined by the intersection of the average cost curve and the demand curve. This pricing scheme eliminates any positive economic profits since price equals average cost. Average-cost pricing

9600-504: The former New Haven main line between New York and Boston was transferred to Amtrak in 1976 and now forms the northern leg of the electrified Northeast Corridor , hosting high-speed Acela Express and regional rail service. The main line between New Rochelle and New Haven is jointly owned by the state of Connecticut and the Metropolitan Transportation Authority of New York, and is served by

9720-429: The generally poorer Ethiopian economics students. Similarly, most patented medications cost more in the U.S. than in other countries with a (presumed) poorer customer base. Typically, a high general price is listed, and various market segments get varying discounts. This is an example of framing to make the process of charging some people higher prices more socially acceptable. Perfect price discrimination would allow

9840-649: The iconic NH logo. Although a new livery was introduced with the opening of the Hartford Line commuter service in 2018, much of its equipment is shared with Shore Line East , of which some continue to bear the McGinnis livery and the rest have been repainted into the new " CT Rail " livery. All of these lines were formerly owned by the New Haven. The Valley Railroad , a preservation line based in Essex, Connecticut that runs both steam and diesel traction, has painted

9960-595: The industry is resource intensive and requires substantial costs to operate (e.g., certain railroad systems). Market structure is determined by following factors: In economics, the idea of monopolies is important in the study of management structures, which directly concerns normative aspects of economic competition, and provides the basis for topics such as industrial organization and economics of regulation . There are four basic types of market structures in traditional economic analysis: perfect competition , monopolistic competition , oligopoly and monopoly. A monopoly

10080-487: The interior of a never-built design for articulated commuter coaches. When McGinnis departed in 1956, he left the company financially wrecked, a situation exacerbated by severe damage from the 1955 Connecticut floods . In 1959, the New Haven discontinued passenger service on the Old Colony Railroad network in southeastern Massachusetts. That year, the company reported close to $ 11 million in losses. Asked by

10200-581: The largest U.S. bankruptcy until the Enron Corporation superseded it in 2001. The remnants of the system now comprise Metro-North Railroad 's New Haven Line , much of the northern leg of Amtrak 's Northeast Corridor , Connecticut 's Shore Line East and Hartford Line , parts of the MBTA , and numerous freight operators such as CSX and the Providence and Worcester Railroad . The majority of

10320-592: The letter "X" are assigned to companies or individuals who own railcars, but are not operating railroads; for example, the TTX Company (formerly Trailer Train Company) is named for its original reporting mark of TTX. In another example, the reporting mark for state-funded Amtrak services in California is CDTX (whereas the usual Amtrak mark is AMTK) because the state transportation agency ( Caltrans ) owns

10440-466: The marginal cost (which is the output quantity for a perfectly competitive and allocatively efficient market). In 1848, J.S. Mill was the first individual to describe monopolies with the adjective "natural". He used it interchangeably with "practical". At the time, Mill gave the following examples of natural or practical monopolies: gas supply, water supply, roads, canals, and railways. In his Social Economics , Friedrich von Wieser demonstrated his view of

10560-587: The marginal revenue curve has the same x {\displaystyle x} -intercept as the inverse demand curve. Second, the slope of the marginal revenue curve is twice that of the inverse demand curve. What is not quite so evident is that the marginal revenue curve is below the inverse demand curve at all points ( y ≥ 0 {\displaystyle y\geq 0} ). Since all companies maximise profits by equating MR {\displaystyle {\text{MR}}} and MC {\displaystyle {\text{MC}}} it must be

10680-401: The monopolist and none to the consumer. In essence, every consumer would be indifferent between going completely without the product or service and being able to purchase it from the monopolist. As long as the price elasticity of demand for most customers is less than one in absolute value , it is advantageous for a company to increase its prices: it receives more money for fewer goods. With

10800-445: The monopolist to charge each customer the exact maximum amount they would be willing to pay. This would allow the monopolist to extract all the consumer surplus of the market. A domestic example would be the cost of airplane flights in relation to their takeoff time; the closer they are to flight, the higher the plane tickets will cost, discriminating against late planners and often business flyers. While such perfect price discrimination

10920-498: The morning and evening rush hours , and were unable to recover their infrastructure costs. The demise of the New Haven was likely hastened by the 1958 opening of the Connecticut Turnpike , largely paralleling the railroad’s mainline across the state, and the subsequent construction of other interstate highways. With decades of inadequate investment, the New Haven could not compete against automobiles or trucks. In 1954,

11040-514: The most important are as follows: The most significant distinction between a PC company and a monopoly is that the monopoly has a downward-sloping demand curve rather than the "perceived" perfectly elastic curve of the PC company. Practically all the variations mentioned above relate to this fact. If there is a downward-sloping demand curve then by necessity there is a distinct marginal revenue curve. The implications of this fact are best made manifest with

11160-402: The one monopoly profit theorem is not true if customers in the monopoly good are stranded or poorly informed, or if the tied good has high fixed costs. A pure monopoly has the same economic rationality of perfectly competitive companies, i.e. to optimise a profit function given some constraints. By the assumptions of increasing marginal costs, exogenous inputs' prices, and control concentrated on

11280-572: The owner of a reporting mark is taken over by another company, the old mark becomes the property of the new company. For example, when the Union Pacific Railroad (mark UP) acquired the Chicago and North Western Railway (mark CNW) in 1995, it retained the CNW mark rather than immediately repaint all acquired equipment. Some companies own several marks that are used to identify different classes of cars, such as boxcars or gondolas. If

11400-405: The owner, or more precisely the keeper of the vehicle. Thus each UIC member got a two-digit owner code . With the introduction of national vehicle registers this code became a country code. Some vehicles had to be renumbered as a consequence. The Swiss company BLS Lötschbergbahn had the owner code 63. When their vehicles were registered, they got numbers with the country code 85 for Switzerland and

11520-508: The postal service as a natural monopoly: "In the face of [such] single-unit administration, the principle of competition becomes utterly abortive. The parallel network of another postal organization, beside the one already functioning, would be economically absurd; enormous amounts of money for plant and management would have to be expended for no purpose whatever." Overall, most monopolies are man-made monopolies, or unnatural monopolies, not natural ones. A government-granted monopoly (also called

11640-415: The power to charge overly high prices, which is associated with unfair price raises . Although monopolies may be big businesses, size is not a characteristic of a monopoly. A small business may still have the power to raise prices in a small industry (or market). A monopoly may also have monopsony control of a sector of a market. A monopsony is a market situation in which there is only one buyer. Likewise,

11760-426: The power to set prices or quantities although not both. A monopoly is a price maker. The monopoly is the market and prices are set by the monopolist based on their circumstances and not the interaction of demand and supply. The two primary factors determining monopoly market power are the company's demand curve and its cost structure. Market power is the ability to affect the terms and conditions of exchange so that

11880-457: The practice of carefully explaining the "perfect competition" model, mainly because this helps to understand departures from it (the so-called "imperfect competition" models). The boundaries of what constitutes a market and what does not are relevant distinctions to make in economic analysis. In a general equilibrium context, a good is a specific concept including geographical and time-related characteristics. Most studies of market structure relax

12000-455: The price discrimination promotes efficiency. Secondly, by the pricing scheme price = average revenue and equals marginal revenue. That is the monopolist behaving like a perfectly competitive company. Thirdly, the discriminating monopolist produces a larger quantity than the monopolist operating by a uniform pricing scheme. Successful price discrimination requires that companies separate consumers according to their willingness to buy. Determining

12120-403: The price of a product is set by a single company (price is not imposed by the market as in perfect competition). Although a monopoly's market power is great it is still limited by the demand side of the market. A monopoly has a negatively sloped demand curve, not a perfectly inelastic curve. Consequently, any price increase will result in the loss of some customers. Price discrimination allows

12240-453: The product or service less than its price, monopoly pricing creates a deadweight loss referring to potential gains that went neither to the monopolist nor to consumers. Deadweight loss is the cost to society because it is inefficient. Given the presence of this deadweight loss, the combined surplus (or wealth) for the monopolist and consumers is necessarily less than the total surplus obtained by consumers by perfect competition. Where efficiency

12360-766: The railroad created the New England Transportation Company as a subsidiary to operate buses and trucks on routes where rail service was no longer profitable. Under the stress of the Great Depression the company became bankrupt in 1935, remaining in trusteeship until 1947. Common stock was voided and creditors assumed control. During the 88 stations case , the railroad closed 88 stations in Massachusetts and 5 in Rhode Island in 1938, and unsuccessfully attempted to abandon

12480-455: The railways and registered with the Ministry of Railways , Government of India . Monopoly A monopoly (from Greek μόνος , mónos , 'single, alone' and πωλεῖν , pōleîn , 'to sell') is a market in which one person or company is the only supplier of a particular good or service. A monopoly is characterized by a lack of economic competition to produce

12600-762: The railways and registered with the Railway Clearing House . In India, wagons owned by the Indian Railways are marked with codes of two to four letters, these codes normally being the initials of the railway divisions concerned along with the Hindi abbreviation; for example, trains of the Western Railway zone are marked "WR" and "प रे"; those of the Central Railway zone are marked "CR" and "मध्य", etc. The codes are agreed between

12720-490: The revenue maximizing quantity for the monopoly is 12.5 units and the revenue-maximizing price is 25. A company with a monopoly does not experience price pressure from competitors, although it may experience pricing pressure from potential competition. If a company increases prices too much, then others may enter the market if they are able to provide the same good, or a substitute, at a lesser price. The idea that monopolies in markets with easy entry need not be regulated against

12840-412: The risk of losing their monopoly to new entrants. This is likely to happen when a market's barriers to entry are low. It might also be because of the availability in the longer term of substitutes in other markets. For example, a canal monopoly, while worth a great deal during the late 18th century United Kingdom, was worth much less during the late 19th century because of the introduction of railways as

12960-445: The same time continue their business. ...Monopoly, besides, is a great enemy to good management. – Adam Smith (1776), The Wealth of Nations According to the standard model, in which a monopolist sets a single price for all consumers, the monopolist will sell a lesser quantity of goods at a higher price than would companies by perfect competition . Because the monopolist ultimately forgoes transactions with consumers who value

13080-406: The seller divides the consumers into different groups according to their willingness to pay as measured by their price elasticity of demand. Each group of consumers effectively becomes a separate market with its own demand curve and marginal revenue curve. The firm then attempts to maximize profits in each segment by equating MR and MC, Generally the company charges a higher price to the group with

13200-556: The steam era, and more during the transition to diesel. NH was a pioneer in many ways; in streamliners with the Comet , in the use of diesel multiple units (DMUs) in the U.S. with both Budd's regular Budd Rail Diesel Cars (RDCs) and the all-RDC Roger Williams trainset, in the use of rail-adapted buses, in lightweight trains such as the Train X -equipped Dan'l Webster , and in experimentation with Talgo -type (passive tilt) equipment on

13320-518: The storied railroad, and the end to the 19-year saga of its second bankruptcy reorganization. American Financial Enterprises would become the largest single stockholder of Penn Central Company shares by the mid-1990s, controlling 32% of the stock of the company. Freight operations on former New Haven lines passed to Conrail with its government-overseen creation on April 1, 1976. During the subsequent 23 years, Conrail withdrew from much of that territory, abandoning some track and handing other lines over to

13440-648: The student may have been able to purchase at the Ethiopian price. Similarly, a wealthy student in Ethiopia may be able to or willing to buy at the U.S. price, though naturally would hide such a fact from the monopolist so as to pay the reduced third world price. These are deadweight losses and decrease a monopolist's profits. Deadweight loss is considered detrimental to society and market participation. As such, monopolists have substantial economic interest in improving their market information and market segmenting . There

13560-551: The surviving system is now owned publicly by the states of Connecticut , Rhode Island , and Massachusetts , with other surviving segments owned by freight railroads; many abandoned lines have been converted into rail trails . The New Haven system was formed by the merger of two railroads that intersected in New Haven, Connecticut : the Hartford and New Haven Railroad , which began service between New Haven and Hartford in 1839 and reached Springfield, Massachusetts , in 1844, and

13680-442: The team. The three basic forms of price discrimination are first, second and third degree price discrimination. In first degree price discrimination the company charges the maximum price each customer is willing to pay. The maximum price a consumer is willing to pay for a unit of the good is the reservation price. Thus for each unit the seller tries to set the price equal to the consumer's reservation price. Direct information about

13800-650: The train John Quincy Adams . An audacious experiment was the UAC TurboTrain , which with passive tilt , turbine engines and light weight attempted to revolutionize medium—distance railway travel in the U.S. Sponsored by the U.S. Department of Transportation , the Turbo Train holds the U.S. railway speed record of 170 mph, set in 1968. The NH never operated the Turbo in revenue service, as

13920-513: The year's end. Company president George Alpert blamed "government subsidies direct and indirect to our competitors, and inequitable taxes" for the railroad's deficits, pointing to billions of dollars in federal funding for highways and airports. At the insistence of the Interstate Commerce Commission, the New Haven was merged into Penn Central on December 31, 1968, ending rail operations by the corporation. Penn Central

14040-516: Was bankrupt by 1970 and the New Haven corporate entity remained in existence throughout the 1970s as the Trustee of the Estate pursued just payment from Penn Central for the New Haven's assets. Leased by the New Haven since before 1900, the Providence and Worcester Railroad (P&W) successfully exited its lease under Penn Central and resumed operating its own line in 1973. A substantial portion of

14160-580: Was impaired. This often resulted in five-letter reporting marks, an option not otherwise allowed by the AAR. Companies owning trailers used in trailer-on-flatcar service are assigned marks ending with the letter "Z", and the National Motor Freight Traffic Association , which maintains the list of Standard Carrier Alpha Codes, assigns marks ending in "U" to owners of intermodal containers . The standard ISO 6346 covers identifiers for intermodal containers. When

14280-562: Was retained to design a new visual identity for the company. Green and gold trim on rolling stock was replaced by black, red-orange and white, accompanied by a stylized "NH" emblem. Knoll employed architect Marcel Breuer to design the interiors and exterior styling of the three experimental trainsets – the Dan'l Webster , John Quincy Adams , and Roger Williams – that were ordered in 1955. Breuer also designed new station buildings for Rye and New London , neither of which were built, as well as

14400-591: Was used in the 1914 book Social Economics written by Friedrich von Wieser. As mentioned, government regulations are frequently used with natural monopolies to help control prices. An example that can illustrate this can be found when looking at the United States Postal Service, which has a monopoly over types of mail. According to Wieser, the idea of a competitive market within the postal industry would lead to extreme prices and unnecessary spending, and this highlighted why government regulation in

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