Basic Economic Principles
An economic approach to design efficient transportation systems involves maximizing an objective function that reflects both goals and costs. A demand curve can be derived by finding the quantities of a good that solve the maximization problem as one varies the price of that commodity, holding income and the prices of all other goods constant. A supply curve is derived by applying the idea of profit maximization of firms. The production function determines the relationship between input and output.
Tideman, T. N.↗