Question
HI! I'm getting stuck in forming the Private and Social Marginal Cost Equations for Lane 1 and Lane 2 The Qubec government is planning to
HI! I'm getting stuck in forming the Private and Social Marginal Cost Equations for Lane 1 and Lane 2
The Qubec government is planning to build a toll highway connecting new
suburban growth areas with Montral. It must decide whether to build a road
with one or two lanes.
Suppose that the first lane begins to get congested at a volume of 10,000
vehicles per day. Each additional 1,000 vehicles reduce the speed of all cars on
the lane by 1 km per hour. If the road is twice as wide, congestion kicks in at
20,000 vehicles but now declines by 1 km per hour for each 2,000 additional
vehicles.
The free-flow speed is 100 km/h.
Suppose that the only variable cost on this road is the cost of drivers' time, which
they value at $10/hour and the length of the road is 50 kilometers. All drivers
travel on this full segment. Find the equation of the PMC and SMC for 1-lane and 2-lane roads
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