Question One
Transportation demand is a situation that ensues when there is a significant number of people who require to use the transport sector when the resources are inadequate. The need for transportation is not resultant from the direct benefits, but rather from the ripple effects that come with a sustainable transport sector. For example, shippers transporting cargo reap economic benefits from the transportation sector because the goods sell for substantial gains. Moreover, carriers who deal mostly in the carriage of people obtain tangible benefits from the transportation cost of facilitating the movement of crew members. Inelastic demands are those where the services offered changes marginally with an increment in pricing while elastic demands are those that have a significant increase amounting to goods or services supplied with a proportionate growth in price. Shippers and carriers find the aggregated demand for transport valuable because it clearly stipulates the type of transportation demand, the volume of the demand. Moreover, the derived demand is not dependent upon the transportation demand. An elastic demand means a useful system where the value for money is sure since the pricing of commodities has its basis on the volume of products or people transported.
Question Two
Improved transportation has significant effects on the value of land. The land around an area of modern infrastructure is bound to have higher prices because of the urbanization and improvement in the ability to yield economic benefits. A well-developed infrastructure for transportation translates to good industrial development since industries have to transport their raw materials in time to realize maximum economic advantages. The economic costs of improved infrastructure manifest in the degenerative changes in the environment due to the release of harmful gasses into the atmosphere from fuel combustion both for the transporting vehicles and the industries developed. The hewing down of tries to create space for the infrastructure is also a cause of adverse changes due to improved transport.
Question Three
The Federal Maritime Commission in the US is responsible for the management of maritime affairs for the government. Vessels are operating common carriers which are involved in the transportation of individuals from one place in the US to a foreign country. Some of the policies enforced are the requirement to limit the cargo or volume carried ("Vessel-Operating Common Carriers", 2017). The regulation ensures safe transportation in ships because the carrying capacity of the ship is not exceeded, limiting the risk to the lives or property. The Federal Highway Agency comes up with policies aimed at maintaining sanity in the roads such as a requirement for vehicle registration with the government. The advantages of increasing regulations can be an enhancing of safety and communication. The disadvantages could be a weak environment for trade and economic development due to discouragement by stringent rules.
Question Four
`Value of service pricing emphasizes the price tag of a service based on the potential which the service has to satisfy the needs of the customer. In contrast, the cost of service pricing considers the money invested in the production of the service as an indicator of the price placed upon the service delivered ("The Differences Between Value-Based Pricing & Cost-Based Pricing", 2017). For example, an agricultural company might consider all expenses in processing a product and place its market price just a little higher while an art company focuses more on the sentimental value rather than the cost of production of the service.
References
Vessel-Operating Common Carriers. (2017). Fmc.gov. Retrieved 15 January 2017, from http://www.fmc.gov/resources/vessel_operating_common_carriers.aspx
The Differences Between Value-Based Pricing & Cost-Based Pricing. (2017). Smallbusiness.chron.com. Retrieved 15 January 2017, from http://smallbusiness.chron.com/differences-between-valuebased-pricing-costbased-pricing-23095.html
