Production costs, congestion, scope and scale economies in urban bus transportation corridors

A microeconomic model is developed to study the main characteristics of production costs in urban bus corridors. A multiproduct formulation is used, considering trips during peak and off peak periods as different products. The influence of the demand structure and congestion in the production of trips are considered in the analysis. Production and cost functions are specified using a fix proportion technology. The characteristics of period specific economies of scale, ray scale economies and transray convexity are studied with and without congestion. A numerical example is presented to illustrate the results obtained.