Question
Gus the cab driver rents a cab and pays for gas. In each of the following circumstances, describe the long-run effect on the price and
Gus the cab driver rents a cab and pays for gas. In each of the following circumstances, describe the long-run effect on the price and quantity of rides Gus offers. a. The price of gas falls. b.The rental price of cabs falls. c. Word gets out that Gus is a really lousy driver. d. A new bus company opens up .e. Gus gets the bill for the new upholstery he installed in his back seat last month and discovers it's 15% more than he expected. f. The wages of factory workers go up, though this ends up having no effect on the demand for cab rides .g .A huge fire destroys half the cabs in town, not including Gus's. h. The city imposes a $1 excise tax on cab rides, but exempts Gus from the tax because he is a good friend of the mayor.
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