Suppose your university decides to increase parking fees in order to deal with the shortage of parking spaces. Nevertheless, the president of your student body convinces the university to pay back the amount spent on higher parking fees to students in the form of a rebate at the end of the school year. Therefore, the increase in parking fees will

A. not solve the parking shortage.
B. will have no effect since it will be offset entirely by the rebate.
C. make the parking shortage even worse.
D. reduce demand for parking and hence alleviate the parking shortage.


Answer: D

Economics

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