Questions (2-6) Partial Equilibrium (ch 14) - Suppose the local market for taxis is perfectly competitive. Assume that all firms in this industry have identical cost structures, giving rise to the usual shaped marginal and average cost curves. Finally assume the market demand curve for rides from taxi service companies is downward sloping and that the market is currently in long-run equilibrium. Consider the following scenarios for a single firm in this market and discuss any changes (and the timing of those changes) that may occur as a result of each. 5 Question 2 Draw the current LR equilibrium using 2 graphs side-by-side; one for the entire market short-ru and one for an individual firm. Label the current market quantity and price X* and P*, and the quantity produced by each fir 21 hal all curves and axes. Question 2 5 pts Draw the current LR equilibrium using 2 graphs side-by-side; one for the entire market short-run and one for an individual form. Label the current market quantity and price X* and P, and the quantity produced by each form x. How much profit is the firm making? Label all curves and axes. O Question 2 - Draw graph and upload your graph at the end. 5 Question 3 uppose the recent rise in tariffs has lead to rising costs for oil, which in turn has caused gas ompanies to increase the price of gasoline. That effect will this increase have on the taxi market and on an individual firm in this marke aw the graphs from (2) and use them to illustrate your answer. Question 3 5pts Suppose the recent rise in tariffs has lead to rising costs for oil, which in turn has caused gas companies to increase the price of gasoline. What effect will this increase have on the taxi market and on an individual form in this market? Re- draw the graphs from (2) and use them to illustrate your answer. Briefly Explain/ Discuss below what, if anything, happens in the SR and/or LR. ALSO - Draw graph and upload your graph at the end. Edit View Insert Format Tools Table : 12pt v Paragraph Question 4 5 pts Ignore question 3. Suppose the state lowers the annual cost of taxi medallions. What effect will this have on the taxi market and on an individual firm in this market? Re-draw the graphs from (2) and use them to illustrate your answer. Briefly Explain/Discuss below what, if anything, happens in the SR and/or LR. ALSO - Draw graph and upload your graph at the end. Edit View Insert Format Tools Table 12ptParagraph B I U A Tv Question 5 5 pts Ignore question 3-4. Suppose the state government increases personal income tax rates. What effect will this have on the taxi market and on an individual firm in this market? Re-draw the graphs from (2) and use them to illustrate your answer. Briefly Explain/ Discuss below what, if anything, happens in the SR and/or LR. ALSO - Draw graph and upload your graph at the end. Edit View Insert Format Tools Table 12pt Paragraph e Tv Question 6 5 pts Ignore question 3-5. Suppose the local government realizes they undercharged the taxi firm for utilities last year and are requiring the firm to pay up the difference in full immediately. What effect will this have on the taxi market and on an individual firm in this market? Re-draw the graphs from (2) and use them to illustrate your answer. Briefly Explain/ Discuss below what, if anything, happens in the SR and/or LR. ALSO - Draw graph and upload your graph at the end. Edit View Insert Format Tools Table 12pt Paragraph BI U AA Tev Questions (2-6) Partial Equilibrium (ch 14) - Suppose the local market for taxis is perfectly competitive. Assume that all firms in this industry have identical cost structures, giving rise to the usual shaped marginal and average cost curves. Finally assume the market demand curve for rides from taxi service companies is downward sloping and that the market is currently in long-run equilibrium. Consider the following scenarios for a single firm in this market and discuss any changes (and the timing of those changes) that may occur as a result of each. 5 Question 2 Draw the current LR equilibrium using 2 graphs side-by-side; one for the entire market short-ru and one for an individual firm. Label the current market quantity and price X* and P*, and the quantity produced by each fir 21 hal all curves and axes. Question 2 5 pts Draw the current LR equilibrium using 2 graphs side-by-side; one for the entire market short-run and one for an individual form. Label the current market quantity and price X* and P, and the quantity produced by each form x. How much profit is the firm making? Label all curves and axes. O Question 2 - Draw graph and upload your graph at the end. 5 Question 3 uppose the recent rise in tariffs has lead to rising costs for oil, which in turn has caused gas ompanies to increase the price of gasoline. That effect will this increase have on the taxi market and on an individual firm in this marke aw the graphs from (2) and use them to illustrate your answer. Question 3 5pts Suppose the recent rise in tariffs has lead to rising costs for oil, which in turn has caused gas companies to increase the price of gasoline. What effect will this increase have on the taxi market and on an individual form in this market? Re- draw the graphs from (2) and use them to illustrate your answer. Briefly Explain/ Discuss below what, if anything, happens in the SR and/or LR. ALSO - Draw graph and upload your graph at the end. Edit View Insert Format Tools Table : 12pt v Paragraph Question 4 5 pts Ignore question 3. Suppose the state lowers the annual cost of taxi medallions. What effect will this have on the taxi market and on an individual firm in this market? Re-draw the graphs from (2) and use them to illustrate your answer. Briefly Explain/Discuss below what, if anything, happens in the SR and/or LR. ALSO - Draw graph and upload your graph at the end. Edit View Insert Format Tools Table 12ptParagraph B I U A Tv Question 5 5 pts Ignore question 3-4. Suppose the state government increases personal income tax rates. What effect will this have on the taxi market and on an individual firm in this market? Re-draw the graphs from (2) and use them to illustrate your answer. Briefly Explain/ Discuss below what, if anything, happens in the SR and/or LR. ALSO - Draw graph and upload your graph at the end. Edit View Insert Format Tools Table 12pt Paragraph e Tv Question 6 5 pts Ignore question 3-5. Suppose the local government realizes they undercharged the taxi firm for utilities last year and are requiring the firm to pay up the difference in full immediately. What effect will this have on the taxi market and on an individual firm in this market? Re-draw the graphs from (2) and use them to illustrate your answer. Briefly Explain/ Discuss below what, if anything, happens in the SR and/or LR. ALSO - Draw graph and upload your graph at the end. Edit View Insert Format Tools Table 12pt Paragraph BI U AA Tev