(Consider This) Uber's Dynamic Pricing

question 91

Multiple Choice

(Consider This) Uber's dynamic pricing

• A) prevents regulated taxi drivers from changing their fares.
• B) keeps the market for rides in equilibrium by constantly adjusting fares to supply and demand conditions.
• C) creates long wait times for consumers wanting rides at peak demand times.
• D) results in ride pricing that is unfair to consumers.

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Definitions:

Long-run Equilibrium

A state in which, given enough time for all adjustments to be made, there is no incentive for firms to enter or exit an industry, and prices stabilize.

Marginal Revenue

The extra income a business earns by selling an additional unit of a product or service.

Marginal Cost

The elevated cost associated with manufacturing an additional unit of a product or service.

Competitive Firm

A company that operates in a market where it competes against other firms for market share and customers.