Author Question: The taxicab fare in Newville is regulated. The fare currently charged is 6 a ride. Newville taxicab ... (Read 109 times)

pragya sharda · **on:** Jun 29, 2018

The taxicab fare in Newville is regulated. The fare currently charged is 6 a ride. Newville taxicab drivers want to obtain government's permission to lower the fare, which they think will increase their total revenue.

From this we can conclude that the drivers believe that the demand for taxicab rides is A) elastic.
B) inelastic.
C) unit elastic.
D) perfectly inelastic.

Question 2

In the figure above, the demand curve shifts rightward from D0 to D1 so that D1 is the relevant demand curve. Suppose the government imposes a rent ceiling of 500 per month. In the short run there will be

A) a surplus of apartments.
B) a shortage of 200,000 apartments.
C) a shortage of 300,000 apartments.
D) neither a shortage nor a surplus of apartments.