Answer to Question #95557 in Macroeconomics for Harmandeep Kaur

Question

Most provincial parks charge a fixed price for a camping permit and allow you to reserve specific campsites in advance. By the time the summer holiday weekends arrive, all the permits are usually taken. There is excess demand but no price adjustment. Suggest a pricing system for provincial parks that allows them to take advantage of the higher demand for campsites on holiday weekends. Your system should explain who is competing and who is cooperating.

Answer 1

The pricing system for provincial parks should set the higher price for every additional permit above some number of permits sold. In such case consumers are competing, and park and consumers are cooperating.