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Continue to consider the market for ride-share trips from Manhattan to JFK Airport in New York. Assume there is no price ceiling, so the market
Continue to consider the market for ride-share trips from Manhattan to JFK Airport in New York. Assume there is no price ceiling, so the market is competitive and clears at the competitive equilibrium. For each of the following scenarios, consider whether: (i) the equilibrium price increases, decreases, or stays the same; (ii) the equilibrium quantity increases, decreases, or stays the same; (iii) the demand curve shifts up, shifts down or stays the same; and (iv) the supply curve shifts up, shifts down, or stays the same. The scenarios to consider are: (a) [8 points] The introduction of driverless ride-share cars that lowers the cost of supplying trips. (b) [8 points] Hybrid works means fewer people work and live in Manhattan, reducing demand for ride-share trips in the market. (c) [8 points] The government provides a subsidy for public transportation rides between Manhattan and JFK Airport, lowering the price of the substitute for ride-share trips. (d) [8 points] The State of New York reduces income taxes, increasing the (after-tax) income of consumers in the market for ride-share trips
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