If the average cost of transporting a passenger on the train from Chicago to St. Louis is $75, it would be irrational for the railroad to allow any passenger to ride for less than $75.

The average cost includes fixed costs (which do not change with the number of passengers) and variable costs. If the variable cost of an additional passenger is less than $75, it could still be rational to allow them to ride for less, as long as the price covers the variable cost and contributes to fixed costs.