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Congestion pricing is an attempt to deal with congestion externalities by charging drivers a toll based on the amount of congestion that typically occurs at
Congestion pricing" is an attempt to deal with congestion externalities by charging drivers a toll based on the amount of congestion that typically occurs at the time of day they are driving. This problem is going to walk you through the steps of determining the optimal congestion toll at different times of day. Start with a graph that has cost per vehicle trip on the y-axis and the number of vehicle trips per hour on the x-axis. The demand curve in this context represents the willingness to pay for a given trip and can also be thought of as showing the benefit a driver receives from a trip put in dollar terms. The supply curve in this context shows the private marginal cost of a vehicle trip - it includes the costs drivers impose on themselves such as gasoline usage and wear and tear on their vehicle
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