Originally posted by Duchess64
Jordan Cox was upset by the cost of a train ticket from Sheffield to his home in Shenfield,
Essex, England. He discovered that it was cheaper to go home by flying via Berlin!
The thing about mass transport is vehicles often have empty seats. The vehicle must move, empty seats or not and there is a marginal cost to filling those seats.
So, for example if a train runs with an empty car or with the car full, it makes very little difference to the cost of running the train. Similarly an aeroplane half full or full costs about the same to fly.
So, if your train or plane is half full, and you are not going to sell any more tickets at the full price, what do you do?
If you are a train, there is a pretty good chance that dropping the prices for the empty seats will loose you business as most of your passengers really have no reasonable alternatives and will be taking a train anyway so anyone who grabs the cheap tickets were probably going to take a different train and just move the time to take advantage of the cheaper tickets.
This doesn't apply to aircraft as a significant number of people choose not to fly if the prices are too high and many of the cheap ticket passengers are customers you would not have had anyway and having them is better than empty seats.
Jordan Cox is an excellent example of this. He filled an empty seat that would have been empty if not for him so the airline made an extra £44 it would not have had otherwise. If the ticket prices had been higher he would not have taken a different flight, he simply would not have flown, so the lower price ticket did not loose the airline any money. From the railways point of view however, apart from this rare exception, Jordan Cox had no choice but to use the train and any other option would have cost more, so offering him a cheaper ticket would have lost them money.
For other price craziness caused by the free market look into the price of medication. The most famous example being this one:
where a drug company raised the price of life saving medication by 5000% for no other reason than to gouge money off buyers because they had a monopoly. It is not an isolated incident, but rather general practice in the drug industry although this was an extreme example, there are many other cases of drug prices rising over 1000% for no other reason than the can get away with it in a monopoly situation.