If taxi cab drivers were no longer required to obtain one of a restricted number of licenses to operate, it is likely that:
A)cab fares would decrease and more taxis would be available.
B)cab fares would increase and fewer taxis would be available.
C)cab fares would not change but more taxis would be available.
D)cab fares would not change but fewer taxis would be available.
E)cab fares would increase and the same quantity of taxis would be available.

Question

Quizplus · Accepted Answer

Removing the restrictions on the number of licenses needed to operate taxis would increase competition in the market. With more drivers able to enter the market, there would be more taxis available, which would lead to decreased fares.

If Taxi Cab Drivers Were No Longer Required to Obtain