Don's Taxicab Service is the only taxi company operating in a large city. In the beginning, Don took over the local taxi market by buying out his competition. Now he sets his own rates as a privately-owned monopoly, but residents and tourists are upset by the very high prices. If there are no economies of scale in taxicab service, then the best solution is most likely
a. to encourage concentration by constructing barriers to entry
b. laissez-faire since the market is clearly contestable
c. antitrust action to break up Don's into a number of firms
d. price regulation by a city commission
e. for the city to take over and operate Don's Taxicab
C
You might also like to view...
At his profit-maximizing level of output, a monopolist's average total cost curve is tangent to his demand curve. The monopolist
a. is earning a negative economic profit. b. may or may not be earning a negative economic profit. c. is earning zero economic profit. d. is earning a positive economic profit.
It is possible to purchase diplomas from diploma mills. The situation in which the degrees are more important than the knowledge they are supposed to represent is called:
A. accreditation. B. credentialism. C. cretinism. D. diplomacy.
A tax levied on purchases of a particular good or service
A. always leads to an increase in total tax revenues. B. always leads to a reduction in total tax revenues. C. is illegal because it is discriminatory. D. is an excise tax.
The period of growth from a trough that brings Real GDP back to its previous peak is called a
A. recovery. B. expansion. C. recession.