3. Suppose that the supply and demand for taxi rides is given by Figure 7-5 and a quota is set at 6 million rides.

Replicate the graph from Figure 7-5, and explain where to find each of the following on your graph:

a. the price of a ride

b. the quota rent

c. the deadweight loss resulting from the quota Suppose the quota on taxi rides is increased to 9 million.

d. Draw another graph to illustrate what happens to the quota rent and the deadweight loss in this scenario.

Explain your findings