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 set at P₁ would reduce the quantity demanded below the quantity supplied, creating a shortage. At 11 p.m., the same toll would increase the quantity supplied above the quantity demanded, leading to a surplus.

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