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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A) politicians/regulators; taxpayers B) taxpayers; politician/regulators C) taxpayers; bank managers D) bank managers; politicians/regulators
The scientific method is useful
a. only in fields of science such as chemistry and physics b. for testing the validity of theoretical predictions c. for testing the validity of a model's assumptions d. when no economic variables can be assumed to be constant e. only if a theory has been proven to be true