Abstract
TURVEY AND MOHRING'S THEORY IS THAT THE OPTIMAL PRICE FOR SCHEDULED TRANSPORT SERVICES CONSISTS OF (1) PRODUCER MARGINAL COST PLUS (2) THE DIFFERENCE BETWEEN USER MARGINAL COST AND USER AVERAGE COST. IN THE PRESENT PAPER IT IS ARGUED THAT THE "MEDIUM RUN" IS PRICING-RELEVANT. IN THE MEDIUM RUN ITEM (2) IS GENERALLY NEGATIVE BECAUSE OF "VEHICLE NUMBER ECONOMIES" IN USER COSTS. GIVEN CO-EXISTING "VEHICLE SIZE ECONOMIES" IN PRODUCER COSTS, IT FOLLOWS THAT OPTIMAL PRICING YIELDS A FINANCIAL DEFICIT. THE SIZE OF THE DEFICIT DEPENDS ON THE RELATIVE IMPORTANCE OF THE USER COSTS AND SENSITIVITY FOR SERVICE ACCESSIBILITY IN TIME AND SPACE.(Author/publisher).