Question

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8| Mr. Hoff is the head of the taxi-driver's union in local politicians, he is in a positionto influence government regulation. The 2. Big City. Having paid off the S supply curve is completely elastic (i.e. a horizontal line). In other words, any number of drivers are willing to provide taxi service at the cost of $20/hour. The demand for taxis is Q 1000-10P ,where quantity is measured in hours Without government regulation, what are the equilibrium quantity and price in the marketplace? b. What is the producer surplus in the absence of regulation? For an arbitrary (binding) quantity cap, Q, find the producer surplus a. C. d. What quantity cap maximizes producer surplus? e. What is the deadweight loss associated with this quantity cap? for any quortaty, he price in the mauket would be 10 PS=(P20) x Q (100--20) 80 e0- 10 lot 의

Answer 1

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