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Author Question: Figure 4-8 shows the market for taxi rides. The following question(s) are based on this ... (Read 106 times)

silviawilliams41

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on: Mar 15, 2019

Figure 4-8







Figure 4-8 shows the market for taxi rides. The following question(s) are based on this figure.






Refer to Figure 4-8.  To legally drive a taxicab in New York City, you must have a medallion issued by the city government. Assume that only 13,200 medallions have been issued. Let's also assume this puts an absolute limit on the number of taxi rides that can be supplied in New York City on any day, because no one breaks the law by driving a taxi without a medallion. Assume as well that each taxi provides 6 trips per day. In that case, the quantity of taxi rides supplied is 79,200 (or 6 rides per taxi × 13,200 taxis). This is shown in the diagram with a vertical line at this quantity. Assume that there are no government controls on the prices that drivers can charge for rides. 

a. What would the equilibrium price and quantity be in this market if there was no medallion requirement?

b. If there was no medallion requirement, indicate the area that represents consumer surplus.

c. If there was no medallion requirement, indicate the area that represents producer surplus.

d. If there was no medallion requirement, indicate the area that represents economic surplus.

e. What are the price and quantity with the medallion requirement?

f. With a medallion requirement in place, what area represents consumer surplus?

g. With a medallion requirement in place, what area represents producer surplus?

h. With a medallion requirement in place, what area represents the deadweight loss?

i. Based on your answers to parts (c) and (g), are taxicab drivers better off with the medallion requirement for taxicabs than without? 

j. Are consumers better off with or without the medallion requirement for taxicabs?

« Last Edit: Mar 15, 2019 by Celeste »
Macroeconomics ¦ Hubbard, O'Brien ¦ 6th Edition
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Marked as best answer by silviawilliams41 on Mar 15, 2019

softEldritch

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Reply #1 on: Mar 15, 2019
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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silviawilliams41

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Reply #2 on: Mar 15, 2019
Thank you!


softEldritch

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Reply #3 on: Mar 15, 2019
Always glad to help...


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