On game days, homeowners near Middletown Universitys stadium used to rent parking spaces in their driveways to
Question:
On game days, homeowners near Middletown Universityʼs stadium used to rent parking spaces in their driveways to fans at a going rate of $11. A new town ordinance now sets a maximum parking fee of $7. Use the accompanying supply and demand diagram to explain how each of the following corresponds to a price-ceiling concept.
a. Some homeowners now think itʼs not worth the hassle to rent out spaces.
b. Some fans who used to carpool to the game now drive alone.
c. Some fans canʼt find parking and leave without seeing the game. Explain how each of the following adverse effects arises from the price ceiling.
d. Some fans now arrive several hours early to find parking.
e. Friends of homeowners near the stadium regularly attend games, even if they arenʼt big fans. But some serious fans have given up because of the parking situation.
f. Some homeowners rent spaces for more than $7 but pretend that the buyers are nonpaying friends or family.
Step by Step Answer:
a Fewer homeowners are willing to rent out their driveways because the price ceiling has reduced the ...View the full answer
