Appendix A Benefit where the related market is a congested road - technical proof
This appendix provides a technical proof of the alternative measure of benefit on related infrastructure referred to in footnote in section 7.2.
The exact benefit area is negative the gap between the marginal social cost (MSC) and average perceived cost (APC) curves between Q1 and Q2,
where TSC is total social cost.
Since
The term
The last term, the resource correction, can be approximated as
Combining the terms:
Assuming
Note that if the cost change is positive, as would occur on an upstream or downstream road where the demand curve shifts rightward,