Originally Posted on August 24, 2016 and reposted on September 27, 2018">The price to drive on a freeway is $0 at all times of the day. This price establishes equilibrium at 3 a.m. but is too low to establish equilibrium at 5 p.m. There is a shortage of freeway space at 5 p.m.

The price to drive on a freeway is $0 at all times of the day. This price establishes equilibrium at 3 a.m. but is too low to establish equilibrium at 5 p.m. There is a shortage of freeway space at 5 p.m.

Graphically show and explain how carpooling may eliminate the shortage.
Graphically show and explain how building more freeways may eliminate the shortage.

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