Because the federal government covered the lion’s share of the costs, Los Angeles built the 17.4-mile-long Red Line subway system in the 1990s, at a cost of $ 4.7 billion ($ 270 million per mile). The fully allocated costs are estimated to be $ 1.15 per passenger mile, whereas the initial fare was $ 0.07 per mile for the journey. Using a graph, explain why output efficiency was or was not served by the subway’s construction.
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