Congestion pricing

Congestion pricing,

Definition of Congestion pricing:

  1. Congestion pricing is a common ploy in the transportation industry where it aims to decrease both congestion and air pollution by charging more for entering especially congested areas of a city.

  2. Based on the economic theory of pricing, congestion pricing is a dynamic pricing strategy designed to regulate demand by increasing prices without increasing supply. The word "congestion" comes from using this strategy as a way to regulate roadway traffic.

  3. The practice by municipalities of installing a fee structure for the use of motorways, bridges or tunnels during high use periods for the purpose of moderating traffic flow. Congestion pricing, which is based on simple supply and demand principles, has been used effectively in high density urban centers such as London and Stockholm that use electronically-collected toll systems . In the U.S. it has been limited to high-occupancy toll roads with mixed results in reducing traffic flow on non-toll highways.

How to use Congestion pricing in a sentence?

  1. Congestion pricing generally imposes price increases for services that are subject to temporary or cyclic increases in demand.
  2. It is a common strategy in industries like transportation, tourism, hospitality, and utilities.

Meaning of Congestion pricing & Congestion pricing Definition