Things aren't as easy as would be implied by the previous questions. We rarely know the demand curve so we have to estimate the consumer surplus using various techniques. Read pages 114-116 of the "Final Business Case" which is in vUWS "Module 4", "Tutorial Plan". Explain how the analysts estimated the consumer surplus for parking and attempt to represent this on a diagram.

One hour to less than 90 minutes 729 90 minutes to less than 2 hours 170 2 hours or more 60 Total 1,372 Source: Victoria University, Community Benets of Victorian Aquatic and Recreation Centre, April 2014 Willingness to pay for parking In order to assess the level of consumer surplus per use ofthe car park, it is important to determine how much users would be willing to pay for the service. There are a number of methods that can be applied to estimate the willingness to pay of community members including stakeholder consultation, and using a market price as an approximation for users willingness to pay. While extensive consultation was conducted prior to the development of the business case, specific questions regarding the willingness of people to pay for car parking were not included. For this reason, the willingness to pay for at grade car parking to users ofthe new aquatic leisure centre is estimated by the current price schedule that is provide by the City of Parramatta Box 32. Based on this data, it is assumed that the willingness to pay and the consumer surplus for the parking services provided by the new aquatic leisure centre is $3.00 per hour. Underground car parking to users of the new aquatic leisure centre is estimated by the current price schedule of multi-level car park rates within Parramatta Box 3-2. Based on this data, it is assumed that the willingness to pay and the consumer surplus for the parking services provided by the new aquatic leisure centre is $4.00 per hour. Box 3-2: Cost ofparki'ng in Parramatta Street parking The City of Parra matta advertises the following price schedule for metered street parking in Parramatta. 0 $3.50 CBD (Central) 0 $2.50 North Parramatta (north of Parramatta River, except Church Street and the southern part ofthe CBD between Church Street, Parkes Street, the railway line and Raymond Street) 0 $1.50 after 6pm and all day Saturday for operating meters 0 $1.50 per hour where there is 10hour parking or all day parking 53.1 12.4 4.4 100.0 The estimated level of surplus from car parking facilities Table 3-36 below outlines the estimated consumer surplus from car parking per an num based on the estimates of car park usage, time spent and consumer surplus levels per user for each of the broad options under consideration. The number of car park visits are not assumed to be affected by the presence of at grade versus underground parking, though are expected to vary across the two broad project options. Table 3-36: The level of consumer surplus from parking, (2017/18 prices) Option 1a Option 1b Option 1c Option 1d Option 2a Option 2b Induced annual car park usage (no.) 65,989 65,989 65,989 65,989 130,918 130,918 Average time spent (mins) 90 90 90 90 90 90 Consumer surplus per hour ($) 3 4 3 4 3 4 Consumer surplus per annum (at capacity) ($m) 0.30 0.40 0.30 0.40 0.59 0.79 Total - real values ($m) 11.8 13.2 11.8 13.2 31.1 35.0 Discounted values - total (PV 2018 @ 7% $m) 3.9 4.4 3.9 4.4 7.2 8.1 No consumer surplus is assumed under the base case due to the assumption that no additional free parking will be provided by the City. 3.6.3.3 Producer surplus Producer surplus arise when the factors of production (labour and capital) are in excess of their opportunity cost. The direct producer surplus is the estimated net surplus resulting from the operation of the facility, based on total revenue less costs (excluding life cycle maintenance costs). It is important to note that any additional producer surplus resulting from expenditure by NSW residents is not generally considered a benefit of a project or proposal under investigation, as this represents a transfer of economic activity within the community of interest. For example, spending at the new aquatic leisure centre may be transferred from neighbouring aquatic centres in the base case. Ordinarily, it would be expected that some proportion of the operating profits would be expected to 'leak' outside of the NSW to business and capital owners that operate interstate or overseas. In the current context, however, 100 per cent of the operating profits due to the new aquatic leisure centre will likely accrue to NSW residents' including the Council and the cafe operator. " The additional operating surplus that remains within the State is considered a benefit of the new aquatic leisure centre Estimating the precise proportion of the producer surplus that would ordinarily flow outside of the State is difficult due to data limitations. For the purpose of the analysis, it is assumed (a priori) that an extra 20 per cent of the incremental producer surplus generated by the project options is likely to stay within NSW than what would have otherwise occurred.$4 Table 3-37 below provides the estimate of the producer surplus generated by the project options and base case based on the assumptions outlined above, and the revenue and operating costs estimated developed by Warren Green Consulting and the life cycle cost estimates developed by Turner and Townsend. 43 It is assumed for the purpose of this analysis that the cafe operator will be owned by local residents. This is consistent with the expected size of the operator (i.e. 4 FTE employees). 44 This assumption has accounted for the assumption that members and learn to swim participants are expected to attend neighbouring centers in the base case, which are assumed to be locally operated and owned. Page 116Table 3-36: The level of consumer surplus from parking, (2017/18 prices) Option 1a Option 1b Option 1c Option 1d Option 2a Option 2b Induced annual car park usage (no.) 65,989 65,989 65,989 65,989 130,918 130,918 Average time spent (mins) 90 90 90 90 90 90 Consumer surplus per hour ($) 3 4 3 4 3 4 Consumer surplus per annum (at capacity) ($m) 0.30 0.40 0.30 0.40 0.59 0.79 Total - real values ($m) 11.8 13.2 11.8 13.2 31.1 35.0 Discounted values - total (PV 2018 @ 7% $m) 3.9 4.4 3.9 4.4 7.2 8.1 No consumer surplus is assumed under the base case due to the assumption that no additional free parking will be provided by the City. 3.6.3.3 Producer surplus Producer surplus arise when the factors of production (labour and capital) are in excess of their opportunity cost. The direct producer surplus is the estimated net surplus resulting from the operation of the facility, based on total revenue less costs (excluding life cycle maintenance costs). It is important to note that any additional producer surplus resulting from expenditure by NSW residents is not generally considered a benefit of a project or proposal under investigation, as this represents a transfer of economic activity within the community of interest. For example, spending at the new aquatic leisure centre may be transferred from neighbouring aquatic centres in the base case. Ordinarily, it would be expected that some proportion of the operating profits would be expected to 'leak' outside of the NSW to business and capital owners that operate interstate or overseas. In the current context, however, 100 per cent of the operating profits due to the new aquatic leisure centre will likely accrue to NSW residents' including the Council and the cafe operator. " The additional operating surplus that remains within the State is considered a benefit of the new aquatic leisure centre Estimating the precise proportion of the producer surplus that would ordinarily flow outside of the State is difficult due to data limitations. For the purpose of the analysis, it is assumed (a priori) that an extra 20 per cent of the incremental producer surplus generated by the project options is likely to stay within NSW than what would have otherwise occurred.$4 Table 3-37 below provides the estimate of the producer surplus generated by the project options and base case based on the assumptions outlined above, and the revenue and operating costs estimated developed by Warren Green Consulting and the life cycle cost estimates developed by Turner and Townsend. 43 It is assumed for the purpose of this analysis that the cafe operator will be owned by local residents. This is consistent with the expected size of the operator (i.e. 4 FTE employees). 44 This assumption has accounted for the assumption that members and learn to swim participants are expected to attend neighbouring centers in the base case, which are assumed to be locally operated and owned. Page 116