Question
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
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.
Furthermore, if the demand is given by T=11,000-100C. That is, if the cost is 0 there would be 11,000 drivers on this road and for each dollar increase in cost, 100 drivers are lost. Determine the equilibrium and optimal volumes for the 1 and 2 lane roads. What tolls would need to be charged to achieve this optimal volume? First invert the equation to C as a function of T.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started