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Should parking be free?

Free parking generates lower total benefit when parking spaces are scarce.

Glossary:

  • consumer surplus
    Consumer surplus is the gap between what buyers are willing to pay and what they actually pay. Consumer surplus is highest when sellers' economic profit is zero and is zero when sellers can practice perfect price discrimination (i.e., selling each unit at buyer's reservation price). See also "economic surplus."
    diagram

Topics:

What Price Means

Keywords

consumer surplus, free parking, paid parking