Consider the following externalities associated with traffic and traffic congestion.
(i) Air pollution externality
(ii) Noise pollution externality
(iii) Non- monetary congestion externality
(iv) Monetary congestion externality
Which of them explain the divergence between the MPC and MSC as more cars enter the road network?
A) Before congestion, (iii) and (iv) explain the divergence; after congestion (iii) and (iv) still explain it.
B) Before congestion, (iii) and (iv) explain the divergence; after congestion (i) , (ii) , (iii) and (iv) explain it.
C) Before congestion, (i) and (ii) explain the divergence; after congestion (i) , (ii) , (iii) and (iv) explain it.
D) Before congestion, (iii) and (iv) explain the divergence; after congestion (i) , (ii) , and (iii) explain it.
E) Before congestion, (ii) and (iii) explain the divergence; after congestion (ii) , (iii) and (iv) explain it.
Correct Answer:
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