Suppose there is a city which licenses cabs,but cab owners find they cannot get anyone to buy their medallions at any price.You can conclude that:
A)selling medallions is illegal.
B)cab owners are making a normal profit.
C)cab fares are higher than the efficient level.
D)the number of licenses issued are limited.

Question

Quizplus · Accepted Answer

If cab owners cannot sell their medallions at any price, it suggests that the market is saturated and they are only making a normal profit, meaning there is no excess demand for medallions.

Suppose There Is a City Which Licenses Cabs,but Cab Owners