Don's Taxicab Service Is the Only Taxi Company Operating in a Large

Multiple Choice

Don's Taxicab Service is the only taxi company operating in a large city. In the beginning, Don took over the local taxi market by buying out his competition. Now he sets his own rates as a privately-owned monopoly, but residents and tourists are upset by the very high prices. If there are no economies of scale in taxicab service, then the bestsolution is most likely

A) to encourage concentration by constructing barriers to entry
B) laissez-faire since the market is clearly contestable
C) antitrust action to break up Don's into a number of firms
D) price regulation by a city commission
E) for the city to take over and operate Don's Taxicab