A gasoline station very near a professional football stadium parks cars on its lot to make money on game days. Last year it charged $4.00 per car and parked 1000 cars. This year it raised the parking price to $5.00 and parked 850 cars. Did the station
owner make a good economic decision in raising the parking prices from one year to the next? Explain.
Please provide the best answer for the statement.
The owner made a good decision in raising price. The total revenue test indicates that total revenue increased with the increase in price. The $4.00 price times 1000 cars produced $4000 in revenue, but the $5.00 price times the 850 cars produced $4250 in revenue, for a gain of $250. These results indicate that demand for parking is inelastic in this price range. The midpoints formula also shows that demand is inelastic in the price range because the coefficient is 0.73.
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Use the following supply and demand graph to answer the question below.
S1 and D1 represent the current market supply and demand, respectively. S2 and D2 represent the socially optimal supply and demand. The positions of the graphs indicate that there is (are) external
A. benefits from production and external costs from consumption of the product. B. costs from production and external benefits from consumption of the product. C. costs from production and consumption of the product. D. benefits from production and consumption of the product.
State and local governments finance expenditures mainly from
A) tax revenue. B) government bonds issued at the state level. C) funds provided by the federal government. D) private bank loans. E) lottery funds.
For state nonmember banks, the "primary" federal regulator is the
A) Federal Reserve. B) FDIC. C) House Banking Committee. D) Comptroller of the Currency.
Hot dogs and hot dog buns are complements. An increase in the price of flour used to make hot dogs buns will
a. increase consumer surplus in the market for hot dog buns and decrease producer surplus in the market for hot dogs. b. increase consumer surplus in the market for hot dogs and increase producer surplus in the market for hot dog buns. c. decrease consumer surplus in the market for hot dog buns and increase producer surplus in the market for hot dogs. d. decrease consumer surplus in the market for hot dog buns and decrease producer surplus in the market for hot dogs.