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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?
According to J.B. Clark's profits arises in a dynamic economy, not in a static one. A static economy is one in which there is absolute freedom of competition population and capital
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Determinants of Demand Price elasticity of demand fluctuates from commodity to commodity. Whereas the demand of some commodities is highly elastic, demand for others is highly
points and its explanation
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