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Table: The Market for Taxi Rides
-(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 licence 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 questions:
Table: The Market for Taxi Rides 
-(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 licence 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

The quota rent is the difference between the price consumers are willing to pay and the price producers receive, which is $3 per ride. The inefficiency is the difference between the equilibrium quantity and the quota limit, which is 3 million rides.

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