King Rat (gkr) wrote,
King Rat
gkr

Eco 200: parking garages

(individual) When federal environmental rulings forced stricter limits on street parking in midtown New York, parking-garage rates rose. Why? New York's consumer affairs commissioner called for a crackdown on parking-garage gougers. What would happen if parking-garage rates were held down by law? Who do you think would end up parking in the garages?

Prices rose because costs rose. With higher costs, garage operators would turn to other uses of their property. With the remaining supply being less than before and demand not changing (at least not simultaneously with the enactment of the limits), prices will rise.

Those willing to pay the non-monetary costs would end up parking in the garages if prices wre held down by law. With prices constrained, garage operators would have little incentive to keep attendants there all day. Once the spots are all fill past a certain point, they can close the doors. So it's likely to be the people who are willing to get up really early to get their spot. And those willing to leave their cars there rather than give up the spot and lose it.

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