What is microeconomics, and how can it effect a transit agency? How does the market work, when dealing with microeconomics?

Microeconomics is the study of how firms and individuals interact usually in a market for goods/services. In the case of a transit agency, there is a legal monopoly either by government contract or through direct government ownership. This means they control the supply curve of the market. The market price and quantity though is still affected by a demand curve just like other markets. If the firm is allowed to, they will try to artificially limit supply to maximize profits but in most cases government controls prices and usually sets them lower than they should be.

This results in a shortage of the goods such as we see in rush hour when you often have to wait for multiple trains to find one you can squeeze into.