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

Question

Quizplus · Accepted Answer

When congestion on the bridge means that the marginal cost of providing access to one more driver is positive, it would be efficient to charge a positive price for drivers to cross the Champlain Bridge in Montreal or the Lion's Gate Bridge in Vancouver. This is because the cost of providing access to one more driver exceeds the benefit derived from their use of the bridge. By charging a positive price, the number of drivers willing to pay the price will decrease, reducing congestion and improving efficiency.

Under What Circumstances Would It Be Efficient to Charge a Positive