Examples of market failure within this market

There are many reasons that road congestion takes place. Some of these include:

1. Public transport is seen by many as an inferior good, which means that as incomes rise, people switch away from inferior goods.

2. The low price of petrol has also led to an increase in road users.

More road users has a lot of negative externalities, here are a few:

Extra travelling time.

Increased business costs.

Emergency services, such as ambulances, police-cars and fire engines, find it harder to function effectively.

Increased pollution, such as air and noise.

Increased probability of more accidents.

More stress for drivers, cyclists, passengers and pedestrians.

Road congestion