Office of Operations Freight Management and Operations

Description of Figure 4. Change in Consumer Surplus from Changing Demand for Transportation as a Function of Unit Generalized Transportation Cost

This linear curve diagram represents the microeconomic framework of industrial reorganization benefits.

The x axis, labeled Transportation Demand per Period, is marked off in three roughly equal points labeled Q subscript zero, Q subscript one asterisk, and Q subscript one. Vertical lines extend upward from those three points. The y axis, labeled Generalized Unit Cost of Transportation, is marked off at two roughly equal points labeled C subscript zero and C subscript one. Horizontal lines parallel with the x axis extend to the right.

Two sloped curves, D and D prime, originate at a mutual point in the upper left. The slopes split at the intersection of horizontal line C subscript zero and vertical line O subscript zero. Slope D prime is a shorter and less steep curve above slope D. The area created by horizontal lines C subscript zero and C subscript one and the y axis and vertical line Q subscript zero is labeled A. The area created by horizontal lines C subscript zero and C subscript one and slope D is labeled B. The area between horizontal lines C subscript zero and C subscript one and slopes D and D prime is labeled C.

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