Consider an urban highway that is subject to traffic congestion. The average cost of travel per mile on that highway is (in cents):

AC ¼ 10 þ 4V;

where V is traffic volume per hour, measured in 100s of vehicles per hour. For example, if V ¼ 500 cars per hour, AC ¼ 30 cents per mile. Assume that the demand for traffic volume per hour (during rush hour) is V ¼ 46  P;

where P is the ‘‘price’’ paid by the driver.

a. Assume that no congestion toll is imposed. Compute V and P.

b. Assume that it is possible to impose the efficient congestion toll. Find the toll, and the efficient levels of V, P, and AC.