Macroeconomics 10th Edition by Roger Arnold

Exercise 8

The price to drive on a freeway is $0 at all times of the day. This price establishes equilibrium at 3 a.m. but is too low to establish equilibrium at 5 p.m. There is a shortage of freeway space at 5 p.m.
a. Graphically show and explain how carpooling may eliminate the shortage.
b. Graphically show and explain how building more freeways may eliminate the shortage.