Question

In many countries, governments set the fares that taxi owners/drivers can charge.

At various times, taxi owners/drivers stage protests asking for an increase in taxi fares because they believe it will increase their revenue.

Graphically represent and explain what taxi owners/drivers are assuming about the price elasticity of demand for taxi rides?

Answer 1

In this in this question, we are going to see, how the cost of the vehicle and operational cost, so that the price per ride are how fixed by governments, and negotiated with the taxi drivers and owners all are discussed in this single topic.

In graph one, we are going to see the number of rides, how it is increased and cost per trip, how it is increased, are then shown in the sketch. That is in the graph. When, the prices versus rights discusses, about how the price and number of rights are increased or decreased, And net profit, how it is going to get development in the customers' benefits are explained very clearly. How the increased number of drivers automatically, in the market, their availability to them getting reduced. The cost of a driver's thus getting decreased so that the customers' benefits to the drivers will go on a reduced. Graph 2, explains, the drivers, how and they are getting benefits and their salaries are benefitted and are discussed graphically. The benefits of the drivers and the benefits of the customers are discussed as above with the Graphs are explained in a detailed manner. Thus, it has been discussed above.