The Economic Principle of Induced Demand and Traffic

A listener wrote to us about the economic principle of induced demand where an increase in supply results in a decline in price and increase in consumption. He was curious if this is true or not. What is the consensus among economists about induced demand and traffic? Morgan: The best way to think about this is absolutely in terms of price and to think about the cost of commuting. If you build more lanes then that reduces congestion which leads to a much lower price of commuting.