Rational Pricing To Improve The Not-fully-used Situation Of Xiyu Highway

Xiyu Highway, located in ShaanXi Province in China, is not fully used, while vehicles congest on its substitutional road, as a result of the not-so-rational toll rate. This paper, firstly, from the road users' point of view, presents the optimal highway pricing model, which is based on the welfare maximization principle, points out the optimal pricing for not-fully-used highway equals average cost of road users;then, from the angle of road providers, based on the basic microeconomic theories, analyzes the relationship between road cost and road pricing, educes the pricing should not less than the average fixed cost of road providers. Finally, combining the pricing principle with the real case of Xiyu Highway, the paper provides some important suggestions, such as Governmental Subsidy, Price Discrimination, and Two-Part Tariff, so as to boost the highway utilization ratio, and improve welfare level of the whole society.