Consider a toll charged in order to recover the past cost of building a road. It could be argued that to be efficient, the toll should instead be set close to zero-because a higher toll will deter some individuals from driving, whereas the incremental cost of another friver is close to zero once the road has been built. Do you agree? Explain.

What do YOU think ?
While we're happy to HELP we won't do all the work for you.
Show us what you have done and where you are having problems..

What do you mean by "efficient"? -- how long it takes to pay off the road? Or how much use the road gets?

Well, the road has been built, say, for $100,000. It has to be paid for with tolls. If you charge each driver $5.00, will some drivers say "Forget it -- too expensive, so I will take a different road"? Two thousand drivers a day are willing to pay $5.00, so that would be $x and it will take how long to pay off the road? If the toll is only $1.00, a lot more drivers will take the toll road, and then how long would it take to pay off the road?

Is "efficient" paying off the road or using the road?

I don't know what a friver is, and can't even guess.
Close to zero, what exactly do you have in mind? To me that's the smallest denomination of money a country has. A penny.
As someone who avoids tolls when I can, I say this: it totally depends on the time of day and how good the alternate routes are.
But I'm not on my way to work, or trying to get into New York City.
If I were the gov't, I would take into account the years to recoup costs. Not everyone has an EZ Pass, and even they have costs behind them.
Then I would compare what other toll roads charge, because there really is a tendency for uproar when one toll gets out of hand, even across state lines.
Lastly, you seem to have forgotten that debt accrues interest, so you can't take 50 years to pay off the contractors, or even reimburse your own coffers.

Quote:

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Originally Posted by joypulv

I don't know what a friver is, and can't even guess.

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d" is next to "f" on the keyboard, so I'm guessing he mistyped and it's "driver," not "friver."

All I could think of was fiver. As in five dollar bill.