Consumer and Producer Surplus Work It Out: Question 2 of 3 The accompanying diagram shows the demand and supply curves for taxi rides in New York City. Uber's entry into the market reduces the quantity of rides demanded from taxis at every price. On the accompanying graph, shift the demand curve to accurately represent the change in demand. Then, move point E₁ to the new equilibrium point. The unlabeled point is to help you answer the next question and is not movable. Assume that New York City politicians respond by imposing a regulated price of $2.50 per mile. Calculate consumer surplus, producer surplus, and total surplus for the taxi market after Uber has entered the market. Consumer surplus: $ Producer surplus: $ Total surplus: $ million million million

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Consumer and Producer Surplus Work It Out: Question
2 of 3
The accompanying diagram shows the demand and supply
curves for taxi rides in New York City.
Uber's entry into the market reduces the quantity of rides
demanded from taxis at every price. On the accompanying
graph, shift the demand curve to accurately represent the
change in demand. Then, move point E₁ to the new
equilibrium point. The unlabeled point is to help you answer
the next question and is not movable.
Assume that New York City politicians respond by imposing
a regulated price of $2.50 per mile. Calculate consumer
surplus, producer surplus, and total surplus for the taxi
market after Uber has entered the market.
Consumer surplus: $
Producer surplus: $
Total surplus: $
million
million
million
Price ($ per mile)
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
0
1.83
1.30
Market for Taxi Rides in NYC
120
240.00 400.00
D
240 360 480 600 720 840 960 1,080 1,200
Quantity of taxi rides (millions of miles)
Transcribed Image Text:Consumer and Producer Surplus Work It Out: Question 2 of 3 The accompanying diagram shows the demand and supply curves for taxi rides in New York City. Uber's entry into the market reduces the quantity of rides demanded from taxis at every price. On the accompanying graph, shift the demand curve to accurately represent the change in demand. Then, move point E₁ to the new equilibrium point. The unlabeled point is to help you answer the next question and is not movable. Assume that New York City politicians respond by imposing a regulated price of $2.50 per mile. Calculate consumer surplus, producer surplus, and total surplus for the taxi market after Uber has entered the market. Consumer surplus: $ Producer surplus: $ Total surplus: $ million million million Price ($ per mile) 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 0 1.83 1.30 Market for Taxi Rides in NYC 120 240.00 400.00 D 240 360 480 600 720 840 960 1,080 1,200 Quantity of taxi rides (millions of miles)
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