​A Parking Lot in a Busy Downtown District Is Experimenting

question 39

Multiple Choice

​A parking lot in a busy downtown district is experimenting with its pricing strategy to figure out where it should price its spaces.Which of the following strategies should it implement?

• A)​Increase parking rates if the lot fills up much earlier than 9am
• B)Decrease parking rates if the lot doesn't fill up until much after 9am
• C)If the lot fills up right around 9am the price is right
• D)​All of the above

---

Definitions:

Optimal Amount

The most efficient, beneficial, or ideal quantity of a good, service, or resource allocation under given circumstances.

Perfectly Elastic

Describes a situation in economics where the quantity demanded or supplied changes infinitely in response to any change in price.

Interest-Rate Cost-Of-Funds

The cost incurred by financial institutions to raise funds that they can then lend to customers, influenced by prevailing interest rates.

Market Interest Rates

The prevailing rate at which borrowers and lenders agree to engage in transactions of debt securities in the financial markets.