The figure below shows the daily demand for entry into the downtown core of a major city by commuter vehicles and by shoppers' vehicles if they were required to pay special traffic fee in order to enter. a) Draw the total demand curve.
b) Assuming that there is no charge for entry, what is the total quantity of vehicles entering downtown?
Suppose that the government, in an effort to reduce the number of vehicles by 40%, decides to impose a traffic fee (the same fee for both groups) for entry into the downtown area.
c) What will be the amount of the fee and how many of each group will enter downtown?
d) Alternately, suppose that government decides to use a two-fee system but still wishes to reduce traffic by 40% of the no-fee level. If it decides to charge shoppers $1, how much will it have to charge commuters?

Question

The figure below shows the daily demand for entry into the downtown core of a major city by commuter vehicles and by shoppers' vehicles if they were required to pay special traffic fee in order to enter.  a) Draw the total demand curve.
b) Assuming that there is no charge for entry, what is the total quantity of vehicles entering downtown?
Suppose that the government, in an effort to reduce the number of vehicles by 40%, decides to impose a traffic fee (the same fee for both groups) for entry into the downtown area.
c) What will be the amount of the fee and how many of each group will enter downtown?
d) Alternately, suppose that government decides to use a two-fee system but still wishes to reduce traffic by 40% of the no-fee level. If it decides to charge shoppers $1, how much will it have to charge commuters?

Quizplus · Accepted Answer

The Answer of The figure below shows the daily demand for entry into the downtown core of a major city by commuter vehicles and by shoppers' vehicles if they were required to pay special traffic fee in order to enter.  a) Draw the total demand curve.
b) Assuming that there is no charge for entry, what is the total quantity of vehicles entering downtown?
Suppose that the government, in an effort to reduce the number of vehicles by 40%, decides to impose a traffic fee (the same fee for both groups) for entry into the downtown area.
c) What will be the amount of the fee and how many of each group will enter downtown?
d) Alternately, suppose that government decides to use a two-fee system but still wishes to reduce traffic by 40% of the no-fee level. If it decides to charge shoppers $1, how much will it have to charge commuters?

The Figure Below Shows the Daily Demand for Entry into the Downtown