Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

As part of the California High Speed Rail System, the Caltrain tracks from SJ toSF will be upgraded to support modestly higher speeds. A key

As part of the California High Speed Rail System, the Caltrain tracks from SJ toSF will be upgraded to support modestly higher speeds. A key question is whatspeed should they be upgraded to. The current speed (80 mph) is unacceptablyslow, but the top speed of the trains (220 mph) may not be appropriate for adense urban/suburban area. Suppose that train ridership isP= 100S, wherePis total daily ridership (passengers) andSis the speed that the train will runat (mph). Suppose that operating at speed S costsC= 100S+ 5S2(note that this cost is independent of the number of passengers that ride). Further supposethat each passenger that rides has a willingness to pay equal to the train fareand that each passenger saves other highway commuters $5 in congestion costsand reduces pollution externalities by $1. Finally, suppose that higher speedscreate more noise for houses located next to the tracks, and that the total costof this noise isN= $S2.

Caltrain is currently in the process of converting from diesel locomotivesto electrification. Electric trains are faster and have no (local) emissions.Assume that the electric trains will reduce pollution externalities by $2 perride (vs $1) and change operating costs toC= 50S+4S2. What operating speed with Caltrain choose with electric trains (assuming it takes intoaccount all costs and benefits)?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Microeconomics

Authors: Roger A Arnold

13th Edition

1337617407, 9781337617406

More Books

Students also viewed these Economics questions

Question

Always have the dignity of the other or others as a backdrop.

Answered: 1 week ago