Last Semester There Were 5,000 Parking Spaces Available on Campus

question 121

Multiple Choice

Last semester there were 5,000 parking spaces available on campus.The price of a parking permit was $80 per semester,and the quantity demanded equaled the quantity supplied at this price.Suppose the number of parking spaces increases by 10% and the elasticity of demand for parking is 0.5.Parking Services should ________ the price of a permit by ________ to guarantee that quantity demanded will equal quantity supplied.

• A) decrease; 10%
• B) decrease; 20%
• C) decrease; 5%
• D) increase; 10%

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Definitions:

Medicaid

A public assistance program that provides health care coverage to low-income individuals and families.

Health Cost Assistance

Financial aid or support programs designed to help individuals cover medical expenses and healthcare costs.

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A contractual agreement in which one party agrees to indemnify or reimburse another for loss that occurs under the terms of the contract.

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An individual who has agreed to receive services or content, typically on a recurring basis, from a provider.