To discourage congestion, a city raised on-street parking rates in a downtown business district. For restaurants in t...

nivensdc on March 7, 2020

Can you explain this?

Can you help me with this one?

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Skylar on March 7, 2020

@nivensdc, happy to help.

We are looking for an answer choice that will help to explain the paradox seen in the passage. This paradox is the increase in both parking prices and restaurant sales. This is a paradox because we would expect the increase in parking costs to disincentivize people from parking, which would in turn likely reduce the number of people who go to/make purchases from the nearby restaurant.

(D) offers an explanation to this paradox. It states that the higher parking rate leads to greater turnover in cars parked in front of the businesses. This suggests that the increased price creates more opportunity for people to find a parking spot, which would in turn mean more opportunity for people to go to/make purchases at the restaurant.

Does that make sense? Please let us know if you have any other questions and best of luck with your studies!