Parked 850 cars did station owner make good economic

Reference no: EM13395137

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 fully the rationale of your answer (i.e., calculate elasticity using the midpoint formula and perform the total revenue test).

Reference no: EM13395137

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