Use the following to answer question:
-(Table: The Market for Taxi Rides)Use Table: The Market for Taxi Rides.If a government quota limit at 7 million rides is imposed on this market,the quota rent that will accrue to the owner of a taxi medallion will be _____ per ride,but there will be a total missed opportunity (inefficiency)to consumers and producers of _____ million rides.
A)$1;1
B)$2;2
C)$3;3
D)$4;4

Question

Use the following to answer question: 
-(Table: The Market for Taxi Rides)Use Table: The Market for Taxi Rides.If a government quota limit at 7 million rides is imposed on this market,the quota rent that will accrue to the owner of a taxi medallion will be _____ per ride,but there will be a total missed opportunity (inefficiency)to consumers and producers of _____ million rides.
A)$1;1 
B)$2;2 
C)$3;3 
D)$4;4

Quizplus · Accepted Answer

$3;3A government-imposed quota that limits the number of taxi rides to 7 million would create a situation where the quantity supplied is less than the quantity demanded at the equilibrium price. The difference between the demand price and the supply price at the quota limit represents the quota rent per ride, which is $3 in this scenario. Additionally, the difference in quantity between the free market equilibrium and the quota limit represents the total missed opportunity or inefficiency, which is 3 million rides in this case.

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