Some members of the city council in Washington, DC, recently proposed requiring every taxi to have a

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Some members of the city council in Washington, DC, recently proposed requiring every taxi to have a medallion, which is essentially a permit to drive a cab. Under the proposal, the number of medallions was fewer than the number of cabs currently on the streets. Using the model illustrated in Figure 6.4, show how this proposal would affect the price of taxi rides to consumers and the overall deadweight loss, if any.

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Public Finance

ISBN: 978-0078021688

10th edition

Authors: Harvey Rosen, Ted Gayer

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