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?
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?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
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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