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In order to increase revenues, an airport plans to change the parking

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In order to increase revenues, an airport plans to change the parking  [#permalink]

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New post 18 Jan 2020, 04:21
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A
B
C
D
E

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89% (01:45) correct 11% (01:52) wrong based on 36 sessions

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In order to increase revenues, an airport plans to change the parking fees it charges at its hourly parking lots. Rather than charging $2.00 for the first two-hour period, or part thereof, and $1.00 for each hour thereafter, the airport will charge $4.00 for the first four-hour period, or part thereof, and $1.00 for each hour thereafter.

Which of the following is a consideration that, if true, suggests that the plan will be successful in increasing revenues?


(A) Very few people who park their cars at the hourly parking lot at the airport leave their cars for more than two hours at a time.

(B) Over the past several years, the cost to the airport of operating its hourly parking facilities has been greater than the revenues it has received from them.

(C) People who leave their cars at the airport while on a trip generally park their cars in lots that charge by the day rather than by the hour.

(D) A significant portion of the money spent to operate the airport parking lot is spent to maintain the facilities rather than to pay the salaries of the personnel who collect the parking fees.

(E) The hourly parking lots at the airport have recently been expanded and are therefore rarely filled to capacity.

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Re: In order to increase revenues, an airport plans to change the parking  [#permalink]

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New post 18 Jan 2020, 17:14
A is the clear winner, as ver few park for more than 2 hours, so the majority use for less than 2 hours. Thus more dollars as per the new fare schedule.
B is IRRELEVANT as it talks about the revenue vs costs and nothing about the effect of the new plan.
C is IRRELEVANT as it shows that people donot use hourly fare schedule
D is IRRELEVANT as it talks about the expenses not about the impact of new fare schedule.
E is IRRELEVANT.

A is the clear winner.

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Re: In order to increase revenues, an airport plans to change the parking  [#permalink]

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New post 18 Jan 2020, 18:44
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A is the answer.

If people leave their cars parked for 4 hours or longer, let's say, 5 hours, then the airport would not increase their profits, as their revenue would be the same.

For the airport to get more revenue, it is necessary that many people who park pay for the four hours but don't park for that long, so they would end up paying a higher rate per hour.
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Re: In order to increase revenues, an airport plans to change the parking  [#permalink]

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New post 20 Jan 2020, 06:08
Ok. So the Argument core is - Changing the parking lot hourly rate will generate more revenue ( Based on the Question stem).

Earlier- First 2 hours for 2$
Now- 4$ for first four hours

If this has to be true then clearly assumption should be that most cars do not park for more than 2 hours and thus that space will be again filled by a new car . Thus in 4 hours they can have 8 $ which 100% more than earlier one.

That is the assumption here.

Only A fits our prethinking
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Re: In order to increase revenues, an airport plans to change the parking   [#permalink] 20 Jan 2020, 06:08
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