Consider the following equations that describe the market for parking around LSU Campus on a regular weekday. The following equations characterize the demand and supply for parking in the market

Q_d = 3600 - 500P

Q_s = 450P -200

a. Assuming that the market for parking is perfectly competitive, find the equilibrium price of parking a car.Answer

b. How many parking spots will be occupied? Answer

c. The weather report predicted that there is a probability of heavy rainfall during this week. Commuters are apprehensive of driving in such uncertain situations and decide to work from home rather than drive. 950 commuters did not drive to their office/school on a regular weekday during this week and this affected the demand for parking spots.

i. Does this reflect an _______________________ in demand?

decrease

increase

ii. If we were to graph this change, which of the following would we note?

Downward movement in demand

Upward movement in demand

Rightward shift in demand

Leftward shift in demand

iii. What is the new equilibrium quantity? Answer

iv. What is the new equilibrium price? Answer