Question

Suppose the local government decides to reduce traffic congestion on a bridge by imposing a toll. The toll will be most effective if the price elasticity of demand for the bridge is:

Answer 1

The toll to reduce traffic congestion will be most effective if the price elasticity of demand is elastic.

Why should the toll be elastic?

An elastic poll means that there is a more than proportionate change in the number of people driving, if a toll is imposed.

This means that imposing a toll on an elastic bridge would lead to less people using the bridge to avoid paying the toll.

Find out more on price elasticity of demand at https://brainly.com/question/7966430.

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