What question did this study set out to answer?

The central aim is to clarify how scale economies influence the relationship between toll revenue and capacity costs at marginal cost pricing.

February 28, 2026

Financing Road Capacity and Returns to Scale Under Marginal Cost Pricing: A Note

Key Points

The central aim is to clarify how scale economies influence the relationship between toll revenue and capacity costs at marginal cost pricing.
Investigated the relationship between toll revenue and capacity costs.
Analyzed how scale economies are measured.
Examined the implications of fixed factor prices on measurement.
Concluded that keeping factor prices fixed is vital for accurately measuring scale economies.
Identified the disagreement on measurement approaches among scholars.

Abstract

It is commonly agreed that the relationship between toll revenue and capacity cost under marginal cost pricing depends on scale economies. What is disagreed is how to measure these scale economies. This note investigates this issue and concludes that, in measuring the relevant scale economies, factor prices should be kept fixed.

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Cite This Study

Berechman et al. (Wed,) studied this question.

synapsesocial.com/papers/69a286490a974eb0d3c0125c https://doi.org/https://doi.org/10.3828/jtep.1991.25.2.177

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