service.” Another possible definition was “the market for intercity transportation, including personal cars,

car rentals, passenger trains, and commuter air flights.” Which definition do you think the bus companies

preferred, and why?

4. As a result of globalization and new information and communications technology, would you expect that

the definitions of markets that antitrust authorities use will become broader or narrower?

5. Why would a firm choose to use one or more of the anticompetitive practices described in Regulating

Anticompetitive Behavior?
276 11 • Review Questions

6. Urban transit systems, especially those with rail systems, typically experience significant economies of

scale in operation. Consider the transit system data in Table 11.4. Note that the quantity is in millions of

riders.

Demand: Quantity

Price

1

2

10 9

Marginal Revenue 10 8

Costs:

Marginal Cost

Average Cost

9

9

TABLE 11.4

6

3

8

6

5

4

7

4

3

5 6

6 5

7

4

8

3

9

2

10

1
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