In our standard tunnel example, suppose that everyone has the same time costs but that 2,000 drivers have regular cars and 2,000 have sport utility vehicles.

SUVs are bigger than regular cars; in an hour, either 1,000 cars or 750 SUVs can go through the tunnel.

a. What happens in the come-as-you-please scenario?

b. What happens with optimal tolls? (Assume that the tolling technology can recognize an SUV and, if required, charge a different toll.)

c. Suppose that SUV drivers are richer than drivers of regular cars and so have different time costs. Under what circumstances would this affect your answer to question b?