• FT = Firm Transportation
  • Reservation = Fixed Cost
  • Commodity = Variable Cost

• IT = Interruptible Transportation
  • Commodity = Variable Cost

• FDQ = Firm Discount Quantity
  • Transport rates fully discounted down to the Lowest Level

• ZDQ = Zero Discount Quantity
  • Transport rates not discounted at all, at max rates

• NDQ = Negative Discount Quantity
  • Representing a premium over max rates

• NDQ Mult = Negative Discount Quantity Multiplier
  • Multiplier used with the max rate to determine the height of the hockey-stick portion of the transportation curve

G2M2® Case Spatial Equilibrium

G2M2® Case Spatial Equilibrium with Constrained Transportation

Transportation constraints raise prices in delivery areas and reduce prices in supply areas and lower both consumer and producer surplus.

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