Prices have soared for parking facilities in downtown Dallas in recent months. Pressure from voters has convinced the Dallas City Council to impose a price ceiling of $5 on all parking garages and lots per day. What effect will this likely have on the market for parking spaces in Dallas? Who will gain? Who will lose?
The $5 price ceiling will likely result in a shortage of parking spaces. At the new lower prices, quantity demanded will increase. More people will wish to park downtown, and both the parking lots/garage owners and the consumers who can't find spaces to park in will lose. Owners will lose revenue and in some cases shut down lots and garages. Consumers who can find a space without much added time spent searching may initially be better off, but will most likely spend more time searching for a space. Some will find no space at all.
You might also like to view...
Suppose a firm can estimate its demand with 100 percent accuracy. In this case, the value of the forecast is equal to ________.
A) zero B) the actual profit the firm earns from having the forecast C) the amount of profit the firm would lose from not having the forecast D) infinity
It is assumed in standard economic theory that a firm makes decisions in an effort to
A) have a highly diversified product. B) become as large as possible. C) maximize its profits. D) maximize its revenue. E) be favoured politically.
Tom takes 20 minutes to cook an egg and 5 minutes to make a sandwich. Jerry takes 15 minutes to cook an egg and 3 minutes to make a sandwich. Tom has a comparative advantage in ________ and Jerry has a comparative advantage in ________
A) cooking eggs; making sandwiches B) making sandwiches; cooking eggs C) neither of these activities; both activities D) both activities; neither of these activities
________ consumption is consumption that does not depend upon the level of GDP
A) Disposable B) Voluntary C) Induced D) Autonomous