To internalize the external costs from traffic congestion,policymakers could
A) reduce the number of drivers' licenses.
B) require smaller cars to be sold.
C) establish a congestion tax.
D) build fewer highways.

Question

Quizplus · Accepted Answer

Establishing a congestion tax is the best choice to internalize external costs from traffic congestion, as it would directly target the use of cars during peak traffic hours and incentivize people to use alternative modes of transportation or carpool. Reducing the number of drivers' licenses and requiring smaller cars to be sold may not be effective solutions, as people may still opt to use their cars during peak hours or choose to purchase larger cars in other regions without these regulations. Building fewer highways may also not solve the issue of traffic congestion, especially in urban areas with limited space for alternative transportation options.

To Internalize the External Costs from Traffic Congestion,policymakers Could