To legally operate a taxi in New York City, a driver must have a medallion issued by the New York City Taxi and Limousine Commission, an agency of the city's government. In 2015 the number of medallions was 13,605.
In recent years the taxi industry in New York and other large cities has encountered competition from companies such as Uber, an app-based service that offers rides from drivers who own their own cars. Uber varies the prices it charges based on the demand for rides, with rides during busier periods, such as Saturday nights, having higher prices.
a. What does the limitation on their number imply about the price elasticity of supply of taxi medallions?
b. Is the supply of Uber rides more or less elastic than the supply of taxi rides in New York City? Briefly explain.