Question 4 - Driving Taxes Consider driving as a market activity. The Private Marginal Cost of adding I driver to the roads is: PMC =T =12+Q This is a model where travel time is given by T and this is equal to 12 + Q: where ( is the total number of drivers on the road. To derive the external cost caused by the Qth driver, use the formula EC(Q) = AT x (Q-1) This is the increase in travel time, multiplied by the number of drivers already on the road. (a) Find the equation for the Social Marginal Cost (SMC) as a function of Q The marginal benefit of adding I more driver is given by PMB = SMB =36- 3Q. (b) What is the free-market equilibrium number of drivers Q*? (c) What is the socially optimal number of drivers (#? (d) What road usage charge (tax) would lead to Q" drivers on the road