Suppose There Are 1,825 Taxi Medallions in Boston, Each Valued

question 103

Multiple Choice

Suppose there are 1,825 taxi medallions in Boston, each valued at about $250,000. Assume the price elasticity of demand for taxi rides is 1; the current price for a taxi ride is $4.75 per mile, and the cost of the ride is $3.00 per mile. How much would a person be willing to pay for a new medallion if the city increased the number of medallions to 2,000? (Hint: The price of the medallions is equal to the total profit from the average total number of miles each medallion will accumulate.)

• A) $160,000
• B) $185,000
• C) $250,000
• D) $337,000

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Definitions:

Facial Nerve

The seventh cranial nerve that controls the muscles of facial expression, taste sensations from the front two-thirds of the tongue, and other functions.

Oculomotor Nerve

The third cranial nerve responsible for the control of most of the eye's movements, including the constriction of the pupil and maintaining an open eyelid.

Dorsal Spinal Cord

The portion of the spinal cord that is oriented toward the back of the body, responsible for transmitting sensory information from the body to the brain.

Ventral Spinal Cord

The front section of the spinal cord, which contains motor neurons that control muscles and movement.