Question

10 Question (2 points) In a small city, Uver, a new ride service, has become very popular with the younger generation. The inverse demand for Uver rides is given by p= 100.00 – , where q is the number of rides demanded and p is the market price per ride. The inverse supply of rides is given by p = 60.00+ . The local government in this small city is concerned that young people will walk less, which will have a negative effect on their health. The government is, therefore, considering two alternatives. The first option is to impose a tax of $7.00 per Uver ride. The other option is to set a price floor in order to reduce the number of Uver rides that people take. The government is not interested in revenue collection. Rather, its goal is to reduce the number of Uver rides that people take. 3rd attempt Part 1 (1 point) ♡ See Hint Suppose the government chooses to use a price floor rather than the tax. To reduce Uver rides to the same level as the tax would, the price floor would have to be set at $ . (Round your answer to two decimals.)

Answer 1

Solotion Qvegtion 10 Gien T2 and P 60 t 00per pde taimpas ed 00 /L Pd 2 Ps 60+14 At equil brium Qd = s 00- 60+9/y loo-60= 39+ 12 449) ) %= (20 and 00-120/12 PO90 Now the tax =g구

Afler tay i) Cd - Ps = + Pd-7Ps (00 4 o0--60 12 34+V 2 33 49/ (33) parti: Suppose govenment Choore-to use a price flor Tather than the tax Teduce uvey idel t» same level a tax would, e Setat 1-5 He pre floor would have To educe Uvey dy to91 tte Pre floor would 00 99 2 have to be set at Pd oo-8.25 91.75