Final answer:
The Atlantic City Expressway experiences a negative externality during peak travel times as more cars on the road than the efficient number lead to increased traffic congestion and a deadweight loss.
Step-by-step explanation:
The scenario described with the Atlantic City Expressway during summer weekends is an example of a market inefficiency known as a negative externality. When individual drivers choose to drive to the beach, they ignore the impact of their driving on the overall traffic congestion.
This behavior typically results in more cars on the road than would be considered efficient, as each driver does not account for the congestion they add to the road. Consequently, there is a deadweight loss, which is an indication of inefficient resource allocation, leading to a loss of societal welfare.
Such negative externalities can occur when the interstate highway system fails to account for the social costs of congestion, thus leading to overuse and traffic jams. While toll roads aim to offset the cost of the construction and maintenance of roads, they may not always be efficient due to the high cost of collection and the resulting stop-and-go traffic, which itself can contribute to congestion.
As cities and suburbs grow and more people rely on cars, the federal interstate system faces increased pressure. Policies to manage traffic and to fund infrastructure may not always keep up with this growth, exacerbating the issues of congestion, as seen in busy regions such as Washington, D.C., or the urban centers of India. The inefficiencies described lead to higher levels of pollutants, fuel consumption, commutes, and overall societal costs.