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Car Congestion

VIEWS: 17 PAGES: 4

  • pg 1
									Car Congestion
By Kyung-Min Ro

Links
 http://www.youtube.com/watch?v=dDoNBYvcTs  http://www.youtube.com/watch?v=qun9jiLw w8M  http://www.youtube.com/watch?v=ZHlxdkdT aX8&NR=1

Why is it market failure?
Costs
PMC=SMC

Deadweight loss PFM PS PMB SMB

QS

QFM

Output

Why is it market failure?
 The consumption of cars is a market failure because consumers only consider their own costs and benefits of consumption. For example, by over consuming the cars congestion occurs which slows down economic activities but the costs is not paid by consumers. Also, spill over costs are imposed on 3rd parties for enlarging the roads.


								
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