Question

The UCLA transportation economist Donald Shoup developed a formula to explain the rational maximum cruising time for parking. Calculate the cruising time elasticity (i.e., the point elasticity using calculus) with respect to the price (p). At a price of p=5 and m=12, what is the elasticity of c with respected to p? At this point, how will a 1% increase in p alter the maximum cruising time? Refer to the elasticity you calculated.

Answer 1

To calculate the cruising time elasticity with respect to price, use the formula for point elasticity and substitute the given values. Additional information or calculations are needed to determine the specific values.

Step-by-step explanation:

To calculate the cruising time elasticity with respect to price (p), we can use the formula for point elasticity:

Elasticity = (dc/dp) * (p/c)

Given the values p=5 and m=12, we can calculate the elasticity of c with respect to p as follows:

Let c = (p²2-10*p+24)/(4*p+12)

To find the cruising time elasticity at p=5, we can calculate (dc/dp) at p=5 and substitute that value along with p=5 and m=12 into the elasticity formula.

To calculate how a 1% increase in p will alter the maximum cruising time, we can calculate the elasticity at p=5 and then multiply it by 1% of p.

Based on the information provided, we would need additional information or calculations to determine the specific values for (dc/dp) and the resulting elasticity.

Answer 2

The above elasticity suggests that by raising the curb parking price by 10% reduces the time drive are willing to cruise by only 7.1%. also the increase of curb pricing would make elasticity greater that shows that curb park pricing by 1% reduces the drivers that are willing to cruise by only 2.3 %

Step-by-step explanation:

Solution

Given that:

Now, when we look at the papers designed by the economists for the various formulas of calculating elasticity related to six factors examples like, the price of off street parking, the price of fuel, the number of person or individuals in a car, the price of curb parking, time value, we would notice that the formula for calculating cruising time elasticity with that of curb parking price is stated below:

E = - p/(m-p)

E = -5/12-5

E = -5/7

=-0.714

The above elasticity states that by raising the curb parking price by 10% reduces the time drive are willing to cruise by only 7.1%

Now,

The new elasticity = -7/(10-7)

=-7/3

=-2.33 or 2.33%

It suggests that the increase of curb pricing would make elasticity greater that shows that curb park pricing by 1% reduces the drivers that are willing to cruise by only 2.3 %