a. The municipal corporations in most parishes in Jamaica have initiated aprogram to charge residents for garbage disposal based on the number of cansfilled per week. The parish of Kingston decided to increase its per can pricefrom $500 to $750 per week. In the first week, it was found that the number ofcans that were brought to the curb fell from 500 to 450 (although the workerscomplained that the cans were heavier). The chief economist ran the numbers,informed the mayor that the demand for disposal was inelastic, andrecommended that the price be raised to maximize town revenue from theprogram. Four months later, at a price of $1000 per can, the number of cans hasfallen to 125 and town revenues are down. What might have happened? [3marks]O REDMI NOTE 9S.FRANCIS-KEIL

The objective of the question is to understand the economic concept of price elasticity of demand…

Answered: a. The municipal corporations in most…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1
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The municipal corporations in most parishes in Jamaica have initiated a program to charge residents for garbage disposal based on the number of cans filled per week. The parish of Kingston decided to increase its per-can price from $500 to $750 per week. In the first week, it was found that the number of cans that were brought to the curb fell from 500 to 450 (although the workers complained that the cans were heavier). The chief economist ran the numbers, informed the mayor that the demand for disposal was inelastic, and recommended that the price be raised to maximize town revenue from the program. Four months later, at a price of $1000 per can, the number of cans has fallen to 125 and town revenues are down. What might have happened?

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