Multiple Choice
Without restrictions,the market supply curve is horizontal at P = 5,and the inverse demand curve for taxi cab rides is P = 20 - Q in a competitive market.Subsequently,only 10 taxi cabs are allowed in the market.After the market adjusts to the restricted supply,
A) there will be a decrease in consumer surplus.
B) the remaining taxi cab drivers will make positive economic profits.
C) there will be an increase in producer surplus.
D) All of the above.
Correct Answer:

Verified
Correct Answer:
Verified
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