Question

Fremont has struggled over recent years to keep downtown businesses thriving. Locals report that the inability to park anywhere other than at overpriced parking meters prevents them from shopping downtown. Last week, the city of Clarion reported that adding two new parking lots and decreasing the hourly parking rate in their downtown area increased the surrounding business revenue by 7% in the past year. Fremont and Clarion are similar in terms of population and sales tax rates. The Fremont city manager’s office is looking for ways to increase downtown revenue and asks the public for suggestions.

Which of the following is a likely suggestion the city manager’s office will receive from the public?
a) Fremont should reorganize downtown traffic into one-way street
b) Fremont should increase available parking spaces downtown
c) Fremont should give tax breaks to downtown business owners
d) Fremont should add parking meters to increase revenue.

Answer 1

The city manager's office of Fremont is likely to receive public suggestions to increase available parking spaces downtown in order to boost business revenue, similar to what Clarion did by adding parking lots and lowering parking rates. The correct option is b.

Step-by-step explanation:

The city manager's office of Fremont, seeking ways to increase downtown revenue, is likely to receive suggestions from the public based on similar successful strategies employed by other cities.

Given that locals find overpriced parking meters a deterrent to shopping downtown, the following suggestion aligns with the public's interest and observed outcomes in Clarion: Fremont should increase available parking spaces downtown

By adding more parking lots and potentially decreasing parking rates as Clarion did, Fremont may replicate the 7% increase in business revenue experienced by Clarion.

This suggestion capitalizes on the economic advantages and addresses agglomeration economies, which would be turned into economies of scale that support local businesses, while mitigating the risk of negative effects associated with congestion and high densities such as pollution and crime. The correct option is b.