Question b) the taxi moustry in Victoria was once dominated by major taxi compames such as 13Cabs, Silver Top Taxis, etc. However, the recent entry of new, innovative ride- booking services companies such as Uber, Lyft, Didi, Ola, etc. has put immense pressure on the once dominant traditional taxi companies. Uber and the likes were legalised in Victoria in 2017, which sparked widespread protest from taxi drivers. 0. Draw a diagram that represents a typical traditional taxi company before the introduction of Uber. Assume that the taxi industry is a market of monopolistic competition, and every taxi company was enjoying economic profit before. On your diagram, show clearly the level of output for profit maximisation and the area of economic profit. Taxi companies could earn economic profits due to barriers to entry Graphs shows: Relatively at demand curve showing that there are a number of different companies but each offering a slightly difference products Because of the gov, regulation, taxis can make profits, to show this ATC curve is slightly below Demand curve Output level for maximum profits is at MC = MR