Question 6
It has been stated that the entry of ride sharing companies has resulted in the leftward shift of the demand curve of the taxi cab rides.
The leftward shift indicates the decrease in demand.
So,
Given the supply of taxi can rides, this decrease in demand for taxi can rides will result in a decrease in the equilibrium price and quantity of taxi cab rides.
To operate a taxi cab, license is needed.
The value of license depends on the price and quantity of taxi can rides.
Higher the price and quantity of taxi cab rides, higher would be the value of license and vice-versa.
So,
This decrease in the price and quantity of taxi cab rides due to decrease in demand will result in the decrease in the value of taxi cab licenses as well.
Hence, the correct answer is the option (b).
Question#6. Question 6 Not yet answered If ride-sharing companies begin competing with taxi cab companies, which...
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