In major cities, some residents do not own a car and only travel by subway. While...

In major cities, some residents do not own a car and only travel by subway. While a car commuter both causes and is delayed by traffic congestions, a subway rider’s commute time is unaffected. Nevertheless, what negative externalities fall upon all city residents, including residents who only travel by subway, as a result of traffic congestion? Identify one market-based solution to traffic congestion in a large city.

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Expert Solution

The car commuter can cause an increased traffic congestion in the cities, the people have a more opportunity cost for their time has the most disadvantages in this case. The car commuter can results the increased emission and result in a higher pollution in the city which affects the every people living in that city. The solution for this is a surge pricing, in the method of surge pricing the vehicles in the high traffic congestion time is tolled high. So the surge pricing is able to reduce the traffic congestion in these times. The surge pricing is strategy is very famous in the ride-sharing platforms such as Uber and Lyft. In the times of winter there were not enough taxies for customers so the consumers have to wait for long time so these platforms introduced a surge pricing, so the people can get the taxies but they have to pay a higher prices to get the taxies in the high demand period.

Rahul Sunny answered 1 year ago

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