Plum Crazy

Well, that first ride is really expensive (not sure what an unlimited monthly pass is going for these days). But each subsequent ride has zero marginal cost.

There is no use crying over spilt milk. (colloquial equivilant of sunk costs don't matter.)

Your marginal (explicit) cost is zero, zip, zilch, nada. What do I get again? Oh yeah your admiration, roughly the equivilant of your costs of riding the subway.

However, non-monetary relative cost matter too and may not be a cost, rather a benefit to you. Think time spent waiting on the subway v waiting for the rail.

Now if we are to talk "in the long run" then your long run marginal cost will equal your long run average total cost. Where does that put you in deciding whether or not to buy a subway pass? Do you by the unlimited ride pass for a different reason? Would you still buy it were it not for the benefit of using it to go to work? What is the difference between what you (would be willing) pay for it were it unlimited, except for rinding to work, and unlimited including riding to work?

See economists have two answers, at least, for every question. Short run and long run answers. Short run zero marginal costs and long run average total cost in this case

Justin - you didn't read the fine print. You had to be the first person with the correct answer to win, well. . . nothing. So you don't win nothing, which means you win something. I'll tell you what, for what it's worth, you have my admiration, as Lesley does.

My rationale in buying the monthly pass is based on the number of trips I take. After taxes, the pass costs me $35 a month. At 2 bucks a pop, I need to take at least 18 trips for it to be worth my while. I take a lot more than 18 trips, thus I make out like a bandit. I am the MTA's worst nightmare. :)

As for the whole short- vs. long-run MC, I think you've mistaken me for a factory. As far as I can tell, I experience no diminishing marginal returns when riding the subway. Now when it's 4 pm at work, and I have an eye on the clock, you bet!

I was the first with the complete first answer.

Sure you experience diminishing marginal returns w/ the subway. Otherwise you would never get off. Pass your desired exit and see how fast those marginal returns diminish, in fact turn negative.

That is an excellent point. The subway does cease to be of utility the moment I reach my stop. There are times I think it has ceased to be of utility before I reach my stop. Like this morning, for example, when there was some type of delay, and there were no trains running into or out of the station immediately before my stop. I walked the rest of the way.