Do we really need to explain supply and demand again?

Sadly, apparently, yes we do, we need to explain supply, demand and the role of prices once again:

Rail passengers facing further misery from strikes have described fare increases effective from today as a “kick in the teeth” after it emerged some are paying 43 per cent more for season tickets than they did seven years ago.

The average fare increase of 2.3 per cent across Britain came into effect this morning, though Virgin Trains East Coast has imposed a 4.9 per cent average increase on its services, the highest of any operator.

It is the biggest fare increase since January 2014, despite overcrowding and cancellations getting worse year on year.

One campaign group warned that passengers are being “priced off the railways” by fare increases that have far outstripped wage rises in recent years.

The problem there is the use of the word "despite" - it should be "because".

And to give that basic lesson in supply and demand and the interaction with prices. It is simple enough for demand for something to rise above the possible supply of it. Similarly, demand can fall below the available supply. We call these shortages and gluts. Which is what brings price into it. Prices are the method of rationing such things. As prices rise fewer people desire whatever it is and thus the pressure upon supply is loosened. As prices fall more desire and so that extra supply is snapped up.

Prices move more when either supply and or demand are inelastic (obviously, because elasticity is just the amount that prices move in relation to a supply or demand change) and less when elastic.

The provision of train services is inelastic. At the times that people actually want to travel those iron roads are full. We can't add more carriages because of the lengths of station platforms as well. We can go off an build new railways, yes, or get the signalling better or.....but these all take time. Supply of new capacity is this "chunky" rather than fine grained and as such is inelastic.

Given that this is so then if, as and when demand increases then prices should rise and rise strongly. That is, prices are going up not despite overcrowding but because of overcrowding. What is more they should be too.

Roughly speaking fares pay for the operation of the railways these days even if not for the capital projects to expand capacity. The difference between British railways and continental ones being, roughly, that passengers here receive no taxpayer subsidy while they do there. And why should the general taxpayer be paying for someones' preferred method of travel? 

That the capital costs of expansion are indeed still subsidised from the general revenue rather tells us that fares should rise again, if not again again. For there is no good reason why those who travel upon the railways should not pay the full costs, operating and capital, of travelling upon the railways.

Fares are going up because overcrowding, not despite. And overcrowding will cease if they go up again, either to limit demand or to pay for the expansion of supply.

This supply and demand stuff, the changes in prices, it all really does work. About time that people grasped it, no?