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Could you please help me with the question IV. [12 Marks] Assume the Uber market is a perfectly competitive, constant-cost industry. In April, it is
Could you please help me with the question
IV. [12 Marks] Assume the Uber market is a perfectly competitive, constant-cost industry. In April, it is at long-run equilibrium. Starting in May, the government requires each driver to pay a fixed monthly fee that does not depend on the number of hours worked (or rides provided). In June, the market returns to long-run equilibrium. In this time period, there is no change in demand. SM . SAPRIL PAPRIL .D Q (1) [2 Marks] In the graph, identify a plausible Pre, the price at which Uber drivers break even with the introduction of the fee. (2) [5 Marks] In the graph, show SM, the short-run supply curve in May. Briefly explain how rational driver decisions caused you to depicted SM as you did. (3) [5 Marks] In the graph, show Sy, the short-run supply curve in June. Briefly explain how rational driver decisions caused you to depicted Sy as you didStep by Step Solution
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