If a road is congested, then use of that road 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.

Question

Quizplus · Accepted Answer

When a road is congested, additional use of the road by another person creates a negative externality as it increases the travel time for all other drivers on the road. This is because each additional driver adds to the congestion, which slows down traffic for all other drivers. This is an example of a negative externality because the cost of additional use of the road is borne by all other drivers on the road in the form of increased travel time, while the additional driver does not bear this cost.

If a Road Is Congested, Then Use of That Road