If a Highway Is Congested, Then Use of That Highway

question 7

Multiple Choice

If a highway is congested, then use of that highway by an additional person would lead to a

• A)negative externality.
• B)positive externality.
• C)Pigovian externality.
• D)free-rider problem with rush-hour drivers stuck in traffic.

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Definitions:

Total Revenue

The cumulative income produced from the primary business operations of a company, manifesting from goods or service sales.

Total Cost

The sum of all expenses incurred in the production of goods or services, including fixed and variable costs.

Profit-Maximizing

The process or strategy undertaken by a company to increase its profits to the highest possible level.

Loss-Minimizing

A strategy employed by businesses to reduce financial losses under unfavorable market conditions, often by cutting costs or restructuring operations.