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suppose the government is considering an increase in the toll on a certain stretch of highway from $3 to $4. at present, 1 million cars
suppose the government is considering an increase in the toll on a certain stretch of highway from $3 to $4. at present, 1 million cars use that highway stretch each week; after the toll is imposed, it is projected that the number of cars to use this highway stretch will be less. because of the reduced use of the highway, the government would reduce its purchases of concrete from 500000 tons per year to 319120 tons per year. thus, if the price of concrete were $25 per ton, the government's cost savings would be $2.5 million per year. however, the government's reduced demand for concrete causes its market price to fall from $25 to $24 per ton. moreover, because of this reduction in price, the purchases of concrete by non-government buyers increase by 50000 tons per year. what is the net annual benefit to society that results from the government using less concrete for its highway
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