Question

Big Road Inc., a private company, is hired to build and run a stateÍs entire road system. The company charges high fees to use its roads. It maintains the roads only in heavily populated areas. Which of the following describes this project?

A. positive externality

B. public good

C. market failure

D. negative externality

I think the answer is A

Answer 1

The above project is an example of D. NEGATIVE EXTERNALITY.

Negative externality is defined as the cost that is suffered by a third party as a result of an economic transaction.

Answer 2

Based on the scenario, i think the one that describe this project is : C. market failure
If the road was built as a federal project, it should have low cost and cover a wide area of the region

hope this helps