1. Using a model of Demand and supply illustrate the effect of increased competition from Uber and Lyft on the yellow cab taxi market.

The increased competition from Uber and Lyft in the yellow cab taxi market would result in a shift in the supply curve for traditional taxis. This can be illustrated as follows:

Initially, the market is in equilibrium with the demand and supply of yellow cabs intersecting at point A (P1, Q1). This represents the original price and quantity of yellow cab rides. As more drivers join Uber and Lyft, there is an increase in the number of available rides in the market. This leads to a rightward shift of the supply curve for traditional taxis from S1 to S2.

The new equilibrium is established at point B (P2, Q2), where the increased competition has resulted in a lower price for yellow cab rides (P2) and a higher quantity demanded by customers (Q2).