Transportation Economics/Positive externalities Remember, an
externality is a cost or benefit incurred by a party's decision
or purchase on another, who neither consents, nor is considered
in the decision. Positive and Negative Feedback: A Systems
Approach Equilibrium in a Negative Feedback System Supply and
Demand comprise the economist's view of transportation systems.
They are equilibrium systems. What does that mean?
Transportation costs both time and money. These costs are
represented by a supply curve, which rises with the amount of
travel demanded. As described above, demand (e.g. the number of
vehicles which want to use the facility) depends on the price,
the lower the price, the higher the demand. These two curves
intersect at an equilibrium point. In the example figure, they
intersect at a toll of $0.50 per km, and flow of 3000 vehicles
per hour. Time is usually converted to money (using a Value of
Time), to simplify the analysis. Costs may be variable and
include users' time, out-of-pockets costs (