following changes on the market for taxi service in a city
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This could include factors such as the introduction of ride-sharing services, changes in regulations, shifts in consumer preferences, or changes in technology. Show more…
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According to a news story, after taxi drivers in Paris protested against Uber, the government passed a new regulation "requiring a minimum 15 -minute wait between the time a car is booked and the passenger is picked up." Why would taxi drivers believe they benefit from such a regulation? Would the regulation be likely to increase or decrease economic efficiency in the market for hired rides? Briefly explain.
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A city may limit the number of cabs in many ways. The most common method is an explicit quota using a medallion that is kept forever and can be resold. One alternative is to charge a high license fee each year, which is equivalent to the city's issuing a medallion or license that lasts only a year. A third option is to charge a daily tax on taxicabs. Using figures, compare and contrast the cquilibrium under each of these approaches. Discuss who wins and who loses from each plan, considering consumers, drivers, the city, and (if relevant) medallion owners. (Hint: See the "Licensing Cabs" Application and the discussion of Figure $9.6 .$
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Show the change in the market for restaurant meals that is consistent with the following statement: "When an economic boom raises people's income, the price of restaurant meals rises."
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