The effect of an increased demand for digital taxi apps and non-taxi transportation services on the prices of the New York City taxi medallions. Introduction: Law of Demand - The law establishes an inverse relationship between the demand for a commodity and its price keeping all other variables constant. Price elasticity - Price elasticity of demand is the percentage change in demand with a percentage change in the price. Price elasticity and substitutes -For a given good/service, the higher the number of substitutes the higher the elasticity of demand. If there are more substitutes for a good X, an increase in its price will decrease the demand significantly. The demand and supply analysis - Supply responds to demand in the long run. As the demand for a good/service in a market rises, the producers increase its supply to reap profits from the buyers increased willingness to pay and increase the producers surplus. Taxi Medallions - It is a transferable permit in the United States allowing a taxi driver to operate.

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Chapter 24, Problem 2FCT

To determine

The effect of an increased demand for digital taxi apps and non-taxi transportation services on the prices of the New York City taxi medallions.

Introduction:

Law of Demand- The law establishes an inverse relationship between the demand for a commodity and its price keeping all other variables constant.

Price elasticity- Price elasticity of demand is the percentage change in demand with a percentage change in the price.

Price elasticity and substitutes-For a given good/service, the higher the number of substitutes the higher the elasticity of demand. If there are more substitutes for a good X, an increase in its price will decrease the demand significantly.

The demand and supply analysis- Supply responds to demand in the long run. As the demand for a good/service in a market rises, the producers increase its supply to reap profits from the buyers increased willingness to pay and increase the producers surplus.

Taxi Medallions- It is a transferable permit in the United States allowing a taxi driver to operate.

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