Under What Circumstances Would It Be Efficient to Charge a Positive

question 69

Multiple Choice

Under what circumstances would it be efficient to charge a positive price for drivers to cross the Champlain Bridge in Montreal or the Lion's Gate Bridge in Vancouver?

• A)when it is possible to exclude drivers from the bridge
• B)when it is not possible to exclude drivers from the bridge
• C)when the sum of marginal benefits to all drivers is positive
• D)when the marginal private benefit to the last driver is greater than the marginal private cost to that driver
• E)when congestion on the bridge means that the marginal cost of providing access to one more driver is positive

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Definitions:

Substitutes

Goods or services that can be used in place of each other, where the increase in the price of one leads to an increase in demand for the other.

Price Increases

Occurs when the cost of goods or services rises over a period of time.

Demand for Good

Demand for good refers to the quantity of a product or service that consumers are willing and able to purchase at various prices during a given period.

Equilibrium Quantity

Equilibrium quantity is the quantity of goods or services supplied and demanded at the equilibrium price, where the quantity demanded equals the quantity supplied, leading to market stability.