Table of contentsEconomic model and explanationCongestion chargeBuild more roadsConclusionThe aim of this report is to show the effects of what will happen on the supply curves and demand when three different types of policies are introduced, the three types of policies in the report that will be discussed are: a congestion charge or tax, improving substitutes and building more roads to use. Currently, Brisbane City Council is committed to reducing congestion on the city's road network by taking different approaches to reduce the overall effect of road congestion. The way they reduce traffic congestion is by investing in cycle paths, sharing path improvements, investing in public transport and encouraging alternative ways of traveling. Say no to plagiarism. Get a tailor-made essay on 'Why violent video games should not be banned'?Get an original essayThe time taken to travel to different locations in Australia has increased significantly, an article produced by Phil Manners states that the time taken to travel between destinations are at peak hourly traffic and off-peak traffic are three times longer (Manières). Even a slight reduction in traffic jams can have a significant impact on traffic speeds: a 5% reduction in traffic jams could lead to an increase in speeds of up to 50% (Martin and Thornton). The graph below shows the annual number of trips since 1945, the number of people traveling by car has increased almost tenfold (Cosgrove, Trends in Traffic and Congestion Costs for Australian Capital Cities). Just imagine the amount of pollution, tire rubber, time lost in rush hour traffic, and fuel consumption based on the number of people using motorized passenger transportation. The Total Avoidable Social Costs graph shows the amount of avoidable social costs per year. The Australian government estimates the avoidable cost of congestion at around $16.5 billion, while it will increase to $30 billion by 2030. Economic model and explanationThe economic model presented in Figure 1 shows the effect that a negative externality in production will have on a supply and demand model. When the market is at its most efficient level, it will be efficient in Q1 and efficient in P1. Accounting for negative externalities, the supply curve will shift. on the left, the quantity will decrease towards the second quarter market while the price will increase from the efficient market P1 to the market P2. The objective of this model is to reduce the amount of deadweight loss which is illustrated by the crossed line between the private marginal cost and the social marginal costs. Congestion tax The model in Figure 2 shows the effect of introducing a congestion tax, from Figure 2 it will shift to the left, from the efficient price and quantity labeled by the market Q1 and the market P1 to Q2 efficiency and P2 efficiency. The difference between the two supply curves will be the amount of tax that will be charged. When a congestion charge is introduced, it has benefits such as reducing the number of cars on the roads, leading to a reduction in CO2 and other greenhouse gas emissions, an increase in road safety and new revenue for the government and shorter travel times. disadvantages such as reduced fuel revenue (TPS) and operational costs of supporting the new system. There was a test in Stockholm which.