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Assignment help 7097

I need help with an economics question.A gasoline station very near a professional football stadium parks cars on its lot to make money on game days. Last year it charged $4.00 per car and parked 1000 cars. This year it raised the parking price to $5.00 and parked 850 cars. Did the station owner make a good economic decision in raising the parking prices from one year to the next? Explain your answer fully by performing and showing the relevant calculations (i.e., calculate the price elasticity of demand using the midpoint formula and apply the total revenue test).The answer I got is below. However, I need help with the midpoint formula!The owner made a good decision in raising the price. The total revenue test indicates that total revenue increased with the increase in price. The $4.00 price times 1,000 cars produced $4,000 in revenue, but the $5.00 price times the 850 cars produced $4,250 in revenue, for a gain of $250. These results indicate that demand for parking is inelastic in this price range.

A gasoline station very near a professional football stadium parks cars on its lot to make moneyon game days. Last year it charged $4.00 per car and parked 1000 cars. This year it raised the…

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