There used to be a toll of 50 cents on both the inbound and outbound tunnels lea

Question

There used to be a toll of 50 cents on both the inbound and outbound tunnels leading to airport. They were replaced by $1.00 on the inbound side and no toll on the outbound side. Assume that vehicles cause almost no wear and tear to the tunnels as they pass through.

a) Show that if collection costs are trivial, it is preferable from a welfare point of view to collect the 50 cent tolls in both directions.

b) Suppose that the inbound lane is always congested. Explain why the removal of the toll would not lead to any benefit to consumers, and indeed would lead to greater social cost overall.

I just dont understand how to answer those question. It doesn't make any sense for me of why 50 cents on both ways would be better.

Explanation / Answer

In this case there is an alternative route apart from the tunnels, however, it might be a time consuming one. Hence people prefer to take the tunnels leading to the airport. It will be beneficial for the society that 50 cents are charged on both directions. The tunnels lead to the airport while reaching the airport the passenger is in a hurry for boarding the flight hence he will take the tunnel which the shortest route to airport. So for this it is beneficial for him to pay only 50 cents on entering the tunnel. While returning the cab driver or the persons accompanying him to see him off can take the longer route on return as there is no time constraint on returning.

Removal of the toll will make it free to use the tunnel hence more inflow of traffic will accumulate on the road to tunnel and it will not serve the purpose of time saving to reach the airport.

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