The marginal external cost from congestion, Managerial Economics

The only road connecting two populated islands is currently a freeway. During rush hour, there is congestion because of the heavy traffic. The marginal external cost from congestion rises as the amount of traffic on the road increases. At the current equilibrium, the marginal external cost from congestion is $5 per vehicle. Would a toll charge of $5 per vehicle lead to an economically efficient amount of traffic? If not, would you expect the economically efficient toll to be larger than, or less than $5?

Posted Date: 3/15/2013 2:56:53 AM | Location : United States

Related Discussions:- The marginal external cost from congestion, Assignment Help, Ask Question on The marginal external cost from congestion, Get Answer, Expert's Help, The marginal external cost from congestion Discussions

Write discussion on The marginal external cost from congestion
Your posts are moderated
Related Questions
Marginal Revenue (MR) This is the increase in Total Revenue resulting from the sale of an extra unit of output.  Thus, if TR n-1 is Total Revenue from the sale of (n-1) units

The  fez is the typical Arabic hat in the shape of a short red cylinder. Historians believe it was manufactured in the city of Fes, in Morocco, during the 17 th century. It has be

Q. Explain about isocost line? In economics, an isocost line signifies all combinations of inputs that cost the same total amount. Though, similar to the budget constraint in c

Borrowing Facilities If a country's currency is not convertible, it can borrow from countries whose currencies are convertible and use the convertible currencies to make its i

INTERNATIONAL LIQUIDITY International liquidity is the name given to the assets which central banks use to influence the external value of their currencies.  It can also be

Assume that input prices are constant at r = 1, w = 1, with technology which consists of 5 processes having the following properties: Process Inputs Capital (machine hours)

Generate a computer code to simulate the following solidification situation during a casting process: The material is a well-known polymer known as PEEK (polyetheretherketo

Schumpeter Description According to Schumpeter, a cycle represents wave like deviations in business activity from the equilibrium or trend line. There are equilibrium points an

Hayek explaination Under a fractional reserves system, it is possible for the banking system to supply resources to entrepreneurs for investment in excess of resources that are

Bikes-for-two, Inc., produces tandem bicycles. Its costs have been analyzed as follows: VARIABLE COST Materials $30/unit Manufacturing labor 3 hours/unit ($8/hour) Assembly labor 1