Some Special Evaluation Problems in Particular Sectors
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The production of transport is characterized by important economies of scale, in particular in the short run. The extension of the system will normally have a ‘traffic generation’ effect, that is, the degree of utilization of the already existing facilities is increased. If existing facilities are underutilized, this ‘extra’ traffic can be produced by the existing system, without additional investment, and one has to decide, whether or not to count the ‘extra’ traffic as a part of the return on the new investment.
KeywordsCapital Good Additional Investment Transport Facility Traffic Generation Efficiency Price
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