A Special License Is Required to Operate a Taxi in Many

question 15

Multiple Choice

A special license is required to operate a taxi in many cities.The number of licenses is restricted.More drivers want licenses than are issued.This describes a non-perfectly competitive market because

• A) taxi services are very different.
• B) firms cannot freely enter and exit the market.
• C) transaction costs are high.
• D) the government generates revenue from the licenses.

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Definitions:

Supply of Strawberries

The supply of strawberries indicates the total quantity of strawberries that producers are willing and able to sell at a given price over a specific period.

Market Economy

An economic system where decisions regarding investment, production, and distribution are based on supply and demand, with minimal governmental intervention.

Distribution of Output

The way total production is spread across different agents or locations in the economy.

Consumer Needs

Fundamental requirements that motivate consumer behaviors and decisions in the marketplace.