British Rail, now largely freed from government regulation, bases its freight prices on the prices of its competitors and on quality of service. Costs are used to tell whether, and for how long, br can profitably accept traffic at market prices. Assets will be replaced only to the capacity which is justified by traffics which can bear their long-run marginal costs. In the Common Market countries road and rail are both subject to detailed government regulation of charges.
S. Joy (Wed,) studied this question.