Q2 Z2,(Q2) Z2(Q2) - Institute for Water Resources - U.S. Army

0
(3.6.A) (3.6.B)
Q 2
Fig. 3.6 -- Two .Mode Models
being transported from Market A to Market B; Q l traveling by Mode One
and Q 2 by Mode Two. As in most market situations this solution may
be viewed as the result of an arbitrage process with each consumer
(shipper) constantly striving for the least cost source of supply. It
should be noted that if a capacity limit had not been imposed upon
Mode One it would have carried all the traffic, in this case Qi and no
modal-split would have occurred.
Figure 3.6.B represents a situation where transport rates are no
longer assumed constant. The industry supply curves for the two modes
of transportation are represented by S 1 and S 2 . These curves are added .
set equal to the demand for transportation. The competitive solution
results in a traffic split of Q l and Qo - Q l ■ Q 2 , with transport rates •
-r
equalized at Tr. The diagram shows that a competitive modal-split will
occur only if S t is upward sloping and, at its point of intersection
Q0
horizontally to obtain a total supply of transportation which is then
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