Final answer:
The correct option is c. Yes, urban transit systems reduce traffic congestion and pollution.
Urban areas subsidize urban transit systems to reduce traffic congestion, pollution, and promote use by all socioeconomic groups, considering the positive externalities and economies of scale.
Step-by-step explanation:
Urban areas often subsidize urban transit systems because they provide various socio-economic benefits that are believed to outweigh the costs of the subsidies. These benefits include reducing traffic congestion and minimizing environmental pollution by lowering the number of vehicles on the road. Subsidies also make it more economical for citizens to use public transportation, which can lead to increased usage and higher transit system efficiency due to economies of scale.
Additionally, subsidized transit can result in a number of positive externalities, such as improved air quality and health outcomes. Societies may find these subsidies sensible because they support public goods that may not be effectively provided by the private market alone. Furthermore, offering subsidized transit options can promote equity by providing affordable transportation options for all socioeconomic groups.