Using a toll to reduce traffic when congestion is greatest is an example of a
A)regulation solution.
B)command-and-control policy.
C)corrective tax.
D)Coase theorem solution.

Question

Quizplus · Accepted Answer

The toll is an example of a corrective tax because it is used to internalize the negative externalities of congestion by increasing the cost of driving during peak hours, which in turn reduces the quantity demanded and helps alleviate traffic.

Using a Toll to Reduce Traffic When Congestion Is Greatest