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This paper presents an application of a recently proposed methodology for modeling connected and autonomous vehicles (CAVs) in heterogeneous traffic flow, to investigate the impact of setting dedicated lanes for CAVs on traffic flow throughput. A fundamental diagram approach was introduced which reveals the pros and cons of setting dedicated lanes for CAVs under various CAV penetration rates and demand levels. The performance of traffic flow under different number of CAV dedicated lanes is compared with mixed flow situation. Simulation results indicate that at a low CAV penetration rate, setting CAV dedicated lanes deteriorates the performance of the overall traffic flow throughput, particularly under a low density level. When CAVs reach a dominant role in the mixed flow, the merits of setting dedicated lanes also decrease. The benefit of setting CAV dedicated lane can only be obtained within a medium …