Compared to prices charged by Uber,traditional taxi companies charge government-regulated prices.These government-regulated prices ________ in the market for shared rides.

Question

Quizplus · Accepted Answer

When government-regulated prices are set, they tend to be higher than market prices, resulting in decreased consumer surplus. Consumers are forced to pay the same price regardless of the distance they travel, which means they are paying more for shorter trips and losing out on potential savings. This decreases their overall consumer surplus.

Compared to Prices Charged by Uber,traditional Taxi Companies Charge Government-Regulated