Road congestion has become one of the most demanding problems in metropolitan areas; this is mainly due to the ever-increasing levels of car ownership and relatively slow expansion of road infrastructure. At the same time as experiencing congestion, road users are also creating it, however, in deciding when to travel few people take into account the external congestion costs their trips impose on others. During this essay I am going to be discussing the various externalities of road travel and the possible economic interventions that could help to reduce road congestion.

In order to explain the externalities exper

There is also the problem of road idleness which will occur at off peak times when there is no demand for the roads, demand will in fact be even less than before the expansion was taken place due to many of the original off peak drivers using the roads during peak hours. Expanding capacity will therefore help to reduce road congestion at certain times of the day, but it is definitely not an answer to the problem, expansion would also be a long and expensive process.

Some common words found in the essay are:
Road Congestion, MC AC, AC Figure, Staggering Staggering, MC1 AC1, Expanding Capacity, Toll Charges, road congestion, peak times, Holahan Microeconomics, Bibliography Stiglitz, economic intervention, marginal cost, peak demand, volume traffic, economic interventions, external costs, peak travel, roads peak, Dornbusch Fisher, facility expansion scheme, expansion scheme justified, reduce road congestion, justified strict economic, peak demand curve,
Approximate Word count = 1347
Approximate Pages = 5 (250 words per page double spaced)