This is a photo I took of the traffic on my way home from school at around 6:30pm. In
economics, this congestion can be seen as a market failure in the form of a negative
externality of consumption – the negative effects of using cars on society (social costs), for
instance pollution, exceed the private costs, for instance paying for petrol, that fall upon the
user of the car. It can also be said that partial market failure is occurring in the pricing of the
cars – if traffic volume is high, there is too many cars on the road in this area – this assumes
that the pricing of cars is too low and therefore more people can access/buy them than there
is capacity for them on the roads (misallocation of resources) – a minimum price being put in
place can be used to prevent this from occurring/worsening.
