Question: The marginal and average cost curves of taxis in Metropolis

The marginal and average cost curves of taxis in Metropolis are constant at $0.20/ mile. The demand curve for taxi trips in Metropolis is given by P = 1 - 0.00001Q, where P is the fare, in dollars per mile, and Q is measured in miles per year. If the industry is perfectly competitive and each cab can provide exactly 10,000 miles/ yr of service, how many cabs will there be in equilibrium and what will be the equilibrium fare


View Solution:


Sale on SolutionInn
Sales0
Views58
Comments
  • CreatedDecember 12, 2014
  • Files Included
Post your question
5000