5. Consider the following statements regarding traffic congestion, ERP (Electronic Road Pricing), and the price elasticity of
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5. Consider the following statements regarding traffic congestion, ERP (Electronic Road Pricing), and the price elasticity of driving demand. Assume the optimal ERP charge is estimated accurately. Choose an INCORRECT claim.
(A) When the elasticity is high, the charge can effectively reduce traffic congestion, but the tax revenue may be modest.
(B) When the elasticity is high, the charge can effectively reduce traffic congestion, but the number of unhappy car owners might not be less.
(C) When the elasticity is very low, the charge can cause an outcry among drivers but make little change in traffic congestion.
(D) When the elasticity is very low, the charge can greatly generate tax revenue and largely reduce traffic congestion.
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