Economic

Melbourne Central Business District (CBD) train line is only operated by Metro. Singh and his two (2) friends are from rich families. After graduating from Holmes Institute they wanted to establish a passenger train line in Melbourne Central CBD. Accordingly, they made an application to the Victorian Department of Transport. However, the Victorian Department of Transport rejected their application.

a) Examine the factors that could have contributed to the decision by the Victorian Department of Transport to reject Singh and his friends' application to enter the industry.

b) Examine the price discrimination practices in the train transport industry?