After parking rates were increased substantially from $10 to $16 per day at the "Big Blue Deck" at Detroit's Metro Airport, parking revenue increased from the previous December. Use the information in the following table to calculate the price elasticity of demand for parking spaces at the Big Blue Deck, using the midpoint formula. Assume that nothing happened between December 2007 and December 2008 to shift the demand curve for parking spaces. Be sure to state whether demand is elastic or inelastic.
| Month |
Rate |
Revenue |
| December |
$10 |
$1,387,000 |
| December |
16 |
1,448,000 |
Sources: Mary Francis Masson, "Metro Airport Parking Rate Hikes Worry Employees," Detroit Free Press, February 14, 2009; and Tanveer Ali, "Parking Dips; Revenue Soars," Detroit News, February 13, 2009.