Thursday, August 23, 2007

Unit 1: Price Elasicity of Demand: Car parking charges in Cardiff

This BBC article reports a sharp rise in car parking charges in Cardiff

a) Why do you believe NCP has put up prices?
b) What is likely to happen to demand for spaces in the car parks?
c) Does NCP believe the the demand for these spaces to be elastic or inelastic?
d) Why do you believe this to be the case?
e) Based on your answer to c), draw a diagram to show the effect on NCP's total revenue of this price rise

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