In London,any motorist entering a particular area in the city center during certain specified times must pay a congestion fee equal to £11.50 per day,with fines for noncompliance rising to as high as £130.The congestion fee is:
A)a Pigouvian subsidy aimed at encouraging the use of city streets.
B)an attempt to internalize the costs of traffic delays and congestion.
C)the wrong policy tool for solving the problem of congestion;instead,motorists should be allowed to make deals to determine when and where they are permitted to drive.
D)likely to cause marginal private benefit from road use to decrease.

Question

Quizplus · Accepted Answer

The congestion fee is an attempt to internalize the costs of traffic delays and congestion by imposing a cost on the motorist that reflects the negative externality they impose on others. This incentivizes people to consider alternative modes of transport and reduce traffic and congestion during peak hours.

In London,any Motorist Entering a Particular Area in the City