A toll of $1 per car is imposed on a road regardless of time of day.If the toll creates equilibrium travel flows at the busiest time of day,it will create a __________ at all other times.
A) surplus of space
B) shortage of space
C) zero money price for space
D) zero opportunity cost for space

Question

Quizplus · Accepted Answer

At times other than the busiest, demand for road space decreases, leading to a surplus of space since the toll deters some drivers who might otherwise use the road when it is less congested.

A Toll of $1 Per Car Is Imposed on a Road