<p>It would help if you would explain what MSC and MPC are (thankfully Google lens <a href="http://textbook.stpauls.br/Microeconomics/page_161.htm" rel="nofollow noreferrer">finds it</a>)</p>
<ul>
<li><strong>MPC</strong> = Marginal Privat cost <br></li>
<li><strong>F0</strong> is where the cost are starting to become affected by external costs (congestion here) <br></li>
<li><strong>MSC</strong> = Marginal social cost = MPC + external cost of congestion</li>
<li>D = demand for travel</li>
</ul>
<p>The driver does not take in to account the external cost (the distance ab / difference between MSC and MPC), hence drives more than is socially optimal.</p>
<p>In this example, there is no monetary congestion charge. It simply shows that social costs are higher than personal costs. Therefore, more of the road is consumed (used / being driven on / F1) than is optimal for the society as a whole (F2).</p>

CC BY-SA 4.0
2022-04-27T22:14:08.097Z
2022-04-27T22:50:18.040Z
2022-04-27T22:50:18.040Z
AKdemy
<p>Would someone be able to explain this graph?</p>
<p>When the flow of traffic is higher at F1, why is the cost per trip lower (at b) compared to F2 where the cost per trip is higher (at c)? Lower congestion should mean lower cost per trip right?</p>
<p>Any help would be much appreciated</p>
<p><a href="https://i.sstatic.net/93fYO.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/93fYO.png" alt="enter image description here" /></a></p>

<microeconomics><supply-and-demand>
Road pricing to fix congestion on roads
user41016
# Road pricing to fix congestion on roads

(Asked by: username_0 on 2022-04-27)

Would someone be able to explain this graph?

When the flow of traffic is higher at F1, why is the cost per trip lower (at b) compared to F2 where the cost per trip is higher (at c)? Lower congestion should mean lower cost per trip right?

Any help would be much appreciated

[![enter image description here](https://i.sstatic.net/93fYO.png)](https://i.sstatic.net/93fYO.png)

**Tags:** microeconomics, supply-and-demand

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## 1 answers

### Answer by username_1 on 2022-04-27. Score: 2

It would help if you would explain what MSC and MPC are (thankfully Google lens [finds it](http://textbook.stpauls.br/Microeconomics/page_161.htm))

* **MPC** = Marginal Privat cost
* **F0** is where the cost are starting to become affected by external costs (congestion here)
* **MSC** = Marginal social cost = MPC + external cost of congestion
* D = demand for travel

The driver does not take in to account the external cost (the distance ab / difference between MSC and MPC), hence drives more than is socially optimal.

In this example, there is no monetary congestion charge. It simply shows that social costs are higher than personal costs. Therefore, more of the road is consumed (used / being driven on / F1) than is optimal for the society as a whole (F2).


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