Why does a tax on gasoline often reduce road congestion
A)Gasoline and driving are complementary goods.
B)Gasoline and driving are substitute goods.
C)Gasoline and driving are normal goods.
D)Gasoline is considered an inferior good.

Question

Quizplus · Accepted Answer

A tax on gasoline increases its price, making driving more expensive. Since gasoline and driving are complementary goods, higher gasoline prices lead to reduced driving, thus reducing road congestion.

Why Does a Tax on Gasoline Often Reduce Road Congestion