Exhibit 5-1
Refer to Exhibit 5-1, which shows supply and demand for freeway space at both 8 a.m. and 11 p.m. A toll of P₁ creates __________ at 8 a.m. and __________ at 11 p.m.

Question

Exhibit 5-1 Refer to Exhibit 5-1, which shows supply and demand for freeway space at both 8 a.m. and 11 p.m. A toll of P₁ creates __________ at 8 a.m. and __________ at 11 p.m.

Quizplus · Accepted Answer

At 8 a.m., a toll of P₁ creates a shortage because the quantity supplied (Qs) is less than the quantity demanded (Qd). At the same time, the toll has no effect on the market at 11 p.m. because the supply and demand curves intersect at the equilibrium point, indicating no shortage or surplus.

Exhibit 5-1 Refer to Exhibit 5-1, Which Shows Supply and Demand for and Demand