Efficiency- and climate challenges

Introduction
During the last years we’ve seen a huge increase in the level of cars in Bergen, Norway. This has caused reduced air quality, queues and people beeing withheld in traffic due to the large quantum of vehicles.
In light of theese events two main challenges occours. The pollution created by the queues and the non-effective transportation system. We’re to discuss solutions regarding the pollution and the negative impact the queues have on the productivity of the society.
The city of bergen is faced upon two different strategies for solving theese problemes. i) Introduce higher taxes during the rush hour or ii) driving by plate numbers.

Elasticity
When discussing the following solutions we need to understand the concept of elasticity. How much will the quantity supplied and demanded change due to a change in the price/cost ? To decide which strategy to choose one needs to know about the elasticity of the, in this case, demand.
A situation where the demand is elastic is when the demand changes with a changing in the price. An example is: * Driving a car to work. Driving your own car is, if met with alternative ways of transportation, price elastic because the demand will be affected by a change in price.
An inelastic situation is when the demand for a product does not increase or decrease correspondingly with a fall or rise in its price. For example: * Getting to work. Given the need of income, people will get to work almost regardless of the cost of getting there.
Short-run vs long-run elasticity
Looking at the strategies one should distinguish between the short run and the long run. How much does the demand change in respons to a change in price, regarding how much time which is allowed to pass before we measure the change in quantity.
One usually defines the short run when measuring the