Lets assume that we admitted more students this semester (1200) than last (1100) and because of it there is a shortage of “B” parking spaces. Students also complain about the parking permit price ($100)

a. Graph the short run D & S situation.

b. The following policies have been suggested:

i. Let the price of “B” permits rise.

ii. Convert “A” faculty parking spaces to “B” student spaces.

iii. Buy more land , demolish buildings and make more “B” parking.

iv. Encourage people to be smaller & drive small cars. Make spots smaller.

v. Let the price of “B” permits fall.

Which policy is best? Why? What are its weaknesses?

c. Show the effect of your policy on a graph.