Suppose your university decides to increase parking fees in order to deal with the shortage of parking spaces.Nevertheless, the president of your student body convinces the university to pay back the amount spent on higher parking fees to students in the form of a rebate at the end of the school year.Therefore, the increase in parking fees will:
A)NOT solve the parking shortage
B)Reduce demand for parking and hence alleviate the parking shortage
C)Will have no effect since it will be offset entirely by the rebate
D)Make the parking shortage even worse

Question

Quizplus · Accepted Answer

By increasing the parking fees, the university is aiming to reduce the demand for parking, as students who don't need to use their cars may decide to seek alternative transportation options to avoid paying higher fees. This reduction in demand may, in turn, mitigate some of the parking shortage problems. The rebate, in this case, is a way to offset the extra costs incurred by students who do need to drive to campus regularly. Overall, the combination of higher parking fees and a rebate is likely to reduce demand while also ensuring that the extra costs are not disproportionately borne by certain groups of students.

Suppose Your University Decides to Increase Parking Fees in Order