Canadian Railway Industry

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There are two main firms who are part of the Canadian Railway Industry, the Canadian Pacific Railway and the Canadian National Railway. The Canadian Pacific Railway is a Class I rail carrier that was founded in 1881 and was formerly known as the CP Rail. The CPR is 22,500 kilometres of track that spreads all across Canada and into some parts of the United States. In more detail the Canadian Pacific Rail stretches from Montreal to Vancouver, farthest north Edmonton and also only serves major cities in the United States such as Detroit, New York City, Chicago, and Minneapolis. The Canadian Pacific Railway consists of many train services from freight trains, passenger trains and express trains and many special trains that many more. These special trains include silk, funeral, royal, school, steam, spirit and holiday trains. In 1986 the passenger services were slowly becoming diminished because of being consumed by Via Rail Canada in 1978. Canadian Pacific not only supplied railway services but many others such as; radio, steamships, telegraphs, hotels and even the Canadian Pacific Airlines.
The second main firm that has dominated the Canadian Railway Industry alongside CPR is the Canadian National Railway (CNR). Together they represent more than 75% of the industry's tracks and 95% of the Canada's annual rail tonne kilometres. Presently known has the Canadian National (CN), the railway was formerly known as the Canadian National Railway. The CN unlike the CPR is the largest railway in Canada, it has 32,831km of track which is approximately 12,000 more than the Pacific Railway. It spans from as west as British Columbia all the way to Nova Scotia. Also because of the railways numerous purchases of smaller US railways, the Canadian ...

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...For a firm to be economically efficient, profit must equal marginal cost and that must be equal to the minimum ATC (average total cost). Since oligopolies produce profits that are much greater than the average total cost these firms are not productively efficient despite their sustainable economic profits year by year. As shown in the previous charts you can see that even though the revenue is increasing yearly, the expenses also follow that trend. An action they can approach can be privatization to some extent with some of their employees. "Simply stated, CP is paying its employees 6% more per [revenue ton mile] while handing proportionally 20% fewer carloads," (Deveau, 2012). Aggressiveness with pricing was also touched upon. Pricing below the short run profit maximizing level to possibly reinforce prices closer to the marginal cost and minimum average total cost.

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