1 Before Uber, how were prices set in NYC? Was it a competitive market?

Expert Solution

Before the entry of Uber into the taxi service market of New York City, fares in New York City with respect to taxi services were set by the Taxi and Limousine Commission of New York City.

This commission sets the rate and reviews them every alternate year to see whether ay revision in fare is needed or not.

The taxi service market was not a competitve market. This is due to the fact that there are barriers to entry. A person who wants to ply taxi in New York City has to obtain a medallion from Taxi and Limousine Commission.

These medallions are not freely available and are limited in quantity.

This limited quantity acts as barrier to entry in Taxi service market in New York City and makes it more of monopoly than competitive market.

Secondly, TLC has market power to set fare due to its control of supply of medallions needed to ply taxi. In competitive market, prices are set taking into account market demand and market supply. This is not the case in taxi service market in NYC and thus this was not a competitive market.

Rahul Sunny answered 1 year ago

How do firms in an oligopoly market structure set prices and output?

Explain the role of prices in a perfectly competitive market? Discuss and explain structure of competitive...

Explain the role of prices in a perfectly competitive market? Discuss and explain structure of competitive market.

Suppose a firm in a competitive market face the following costs and prices.

Suppose a firm in a competitive market face the following costs and prices. COSTSREVENUESQuantityProducedTotalCostMarginalCostQuantityDemandedPriceTotalRevenueMarginalRevenue0$0--0$80--1$501$802$1022$803$1573$804$2174$805$2855$806$3656$807$4627$808$5828$80Complete the table.How much will the firm produce to maximize profit?What is the economic profit at the quantity produced to maximize profit?

4.Show how a company in a competitive labour market decides to set the number of workers...

4.Show how a company in a competitive labour market decides to set the number of workers they hire in the short run. What is the nature of the demand curve?

1.Provide an explanation for how market-compatible prices are set by producers, absent any government interference. 2.Explain...

1.Provide an explanation for how market-compatible prices are set by producers, absent any government interference. 2.Explain why the price that one group of producers is willing to pay for any given ingredient (say, milk) becomes the price that other groups of producers (say, of cheese or yogurt) are forced to pay for that same ingredient. 3. Companies are not always successful forever, and they are forced to change. Adaptation in the market is key to longevity, but changes can happen...

Describe the characteristics of a perfectly competitive market and a monopolistically competitive market? How are they...

Describe the characteristics of a perfectly competitive market and a monopolistically competitive market? How are they similar? How are they different?

Are Tesla's prices competitive in the electric car market and do they have a variety of...

Are Tesla's prices competitive in the electric car market and do they have a variety of price points enabling the company to target a variety of market segments?

How would you explain the high prices in the current UK Housing market? If you were...

How would you explain the high prices in the current UK Housing market? If you were in the real estate/property management business, how would you protect your bottom line?

Why do we, as consumers, prefer the prices found in competitive markets? How are the prices...

Why do we, as consumers, prefer the prices found in competitive markets? How are the prices in perfectly competitive markets determined? Explain, Which of the four market structures that we covered is most profitable for the firm? Is this the best market structure for consumers? Why or why not? Explain. We've made a pretty big deal about the differences between fixed and variable costs. Why does variable cost change as output changes? From your perspective as a manager, why is...

What firms in perfect competitive market and monopolistic competitive market have in common? How they are...

What firms in perfect competitive market and monopolistic competitive market have in common? How they are different in the long run? Explain using appropriate graphs.

Question