When congestion occurs on the freeway (because of a shortage of freeway space), an economist would most likely explain this by saying that it is because
A)the freeway has too few miles of roadway.
B)there are too many cars.
C)the price of driving on the freeway is below the equilibrium price.
D)the freeway has too many miles of roadway.

Question

Quizplus · Accepted Answer

Economic theory suggests that when the price of a good or service is below the equilibrium price, a shortage occurs. In the case of the freeway, the price of driving on it (usually in the form of tolls or taxes) may be too low, causing excessive demand and congestion. Therefore, an economist would most likely explain freeway congestion as a result of the price being below the equilibrium level.

When Congestion Occurs on the Freeway (Because of a Shortage