Abe's Taxi Company operates in a perfectly competitive market.Gasoline is a variable input in the taxi services industry.As the price of gasoline decreases,the short-run marginal cost curve for Abe's Taxi Company:

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As the price of gasoline decreases, the variable cost of providing taxi services decreases, causing the short-run marginal cost curve to shift down and to the right. This is because the cost of each additional unit of output decreases, so the curve becomes flatter at each level of output. Therefore, Abe's Taxi Company can produce more output at a lower cost, leading to increased profits in the short run.

Abe's Taxi Company Operates in a Perfectly Competitive Market