Suppose That the Cost of Operating a Taxicab Is $25,000/year

question 97

Multiple Choice

Suppose that the cost of operating a taxicab is $25,000/year and that a cab in full-time operation will collect $35,000/year in fares.
-Refer to the information above.Suppose that entry into the taxi industry is restricted but medallions (licences) can be bought and sold.If the annual interest rate on savings accounts is 10% and the market for medallions is in equilibrium,how much will a medallion cost?

• A) $100.
• B) $1000.
• C) $10,000.
• D) $100,000.
• E) $1,000,000.

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Definitions:

Altered States

Conditions of consciousness that are significantly different from the normal waking state, such as those induced by drugs, meditation, or sleep deprivation.

Consciousness

The state of being awake and aware of one's surroundings and identity, including thoughts, feelings, and perceptions.

Hallucinogenic Drug

A substance that induces alterations in perception, mood, and thought, often creating experiences that differ from objective reality.

Peyote

A small, spineless cactus with psychoactive alkaloids, notably mescaline, used primarily in Native American spiritual ceremonies.