Application 4: Freeways

What does a traffic jam on a route 1 have to do with supply and demand? There is

a demand for driving on route 1 and a supply of space on route 1. The demand,

however, fluctuates between the time of day or season in the year. Let's assume that

the demand on the weekends is greater than the demand on weekdays. Let's

assume that it costs $1 to drive on route 1 on the weekdays and costs $3 on the

weekends. We then have the following:

21) At $1 toll price, would there be congestion on weekdays, weekends, or both?

Describe how this is shown on the graph above.

22) At $1, would the congestion represent a shortage or surplus? Why (explain by

comparing the quantity demanded and the quantity supplied of space on route 1)?

23) At what price would eliminate the congestion on the weekends?

24) At what price(s) is there a surplus of route 1 freeway space on the weekends?

25) If the driving population increases in an area and the supply of freeway space

remains constant, what will happen to freeway congestion? Explain what would

change on the graph above by describing any shifts in the supply or demand curves.

MyDTCC X @ Formative Assessment : X Microsoft Word - Bielan X Homework Help - Q&A x C How It Works - Chegg 1 x 3 On Line Account Manac X + X C @ File | C:/Users/Mayerling/Downloads/ECO122_Assessment2%20(1).pdf M Paused Microsoft Word - Bielanskl_Applications of Supply and Demand.docx 4/4 Application 4: Freeways What does a traffic jam on a route 1 have to do with supply and demand? There is a demand for driving on route 1 and a supply of space on route 1. The demand, however, fluctuates between the time of day or season in the year. Let's assume that the demand on the weekends is greater than the demand on weekdays. Let's assume that it costs $1 to drive on route 1 on the weekdays and costs $3 on the weekends. We then have the following: Toll ($) Supply of space on route 1 $3 Demand on weekdays for space on route 1 Demand on weekends for space on route 1 $1 - + $0 Q1 Q2 Freeway Space on Route 1 21) At $1 toll price, would there be congestion on weekdays, weekends, or both? Start a search O e o qb W 9 3:46 PM 2/15/2020