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:

Tropopause

The boundary in the Earth's atmosphere between the troposphere and the stratosphere, where temperature begins to increase with altitude.

Gaseous Biogeochemical Cycles

The circulation of chemical elements like carbon and nitrogen through the atmosphere, involving exchanges between living organisms and physical processes.

Carbon Dioxide

A gas devoid of color and smell, produced from the burning of carbon-containing compounds and the act of breathing. Naturally found in the environment, it is essential for plant photosynthesis.

Atmosphere

The layer of gases surrounding the Earth that is held in place by gravity and is composed of nitrogen, oxygen, and trace gases.