-Figure 6.8 shows the market for taxicab services in a small town.If the government creates a new law limiting taxicab services to 20 per day,

Question

Quizplus · Accepted Answer

Limiting taxicab services to 20 per day will likely result in a decrease in total surplus because it introduces a constraint on the market that prevents it from reaching its equilibrium, where supply equals demand. This typically leads to inefficiencies such as unmet demand or higher prices, reducing the overall benefits to both consumers and producers.

-Figure 68 Shows the Market for Taxicab Services in a Small