The Washington area Metro charges different rates at peak use times (rush hour) as compared to at other times. The payments also go up the further you travel. This contrasts with the New York or Chicago Subway systems which charge one price at all times no matter how far you travel.

a). Attempt to describe the microeconomic logic of each system. Provide a graph or two if you are able.

b). Would micro prefer the DC pricing model or the NY/Chicago model? Discuss

c). Could it be a wise idea, in certain cases, to make the price of using public transport free?