To legally operate a taxi in New York City, a driver must have a medallion issued by the New York City Taxi and Limousine Commission, an agency of the city’s government. In 2019 the number of medallions was 13,587—a number that has remained unchanged since 1937. In recent years the taxi industry in New York and other large cities has encountered competition from companies such as Uber and Lyft, app-based ride-hailing services that offer rides from drivers who own their own cars. Uber uses surge pricing, under which it varies the prices it charges based on the demand for rides, with rides during busier periods, such as Saturday nights, having higher prices. In 2019, there were more than 80,000 cars in New York City offering rides through ride-hailing apps.

a. What does the limitation on the number of taxi medallions imply about the price elasticity of supply of medallions? 

b. Does surge pricing make the supply of Uber rides more or less elastic than it would be if prices were fixed, the way they are for taxi rides? Briefly explain. 

c. In 2018, the New York City government froze the number of cars the ride-hailing firms could operate in the city. What effect is this freeze likely to have on the price of an Uber ride in New York City?