Issuing a Fixed Number of Licenses to Operate a Taxicab

Multiple Choice

Issuing a fixed number of licenses to operate a taxicab in a city would mean that the number of:

A) cabs and fares are both above the efficient level.
B) cabs is less than the efficient quantity and fares are above free-market levels.
C) cabs is above the efficient level and fares are depressed below the free-market level.
D) cabs and fares are both below the efficient level.