After many years, a small community decides to build a toll road but then discovers it is little used.If it wishes the road to be used at the socially optimal level, the community should:
A)set the toll higher.
B)set the toll equal to $1.
C)set the toll equal to zero.
D)build another toll road.

Question

Quizplus · Accepted Answer

If the toll road is little used, it means that the toll is too high and not many people are willing to pay it. Therefore, the community should set the toll equal to zero in order to encourage more people to use the road and reach the socially optimal level. Setting the toll higher or building another toll road would not solve the problem of low usage and could potentially make the situation worse. Setting the toll at $1 could also deter some people from using the road, especially if there are alternative routes available.

After Many Years, a Small Community Decides to Build a Toll