Problem
In large cities, taxi fares are often set above the market equilibrium rate. Sometimes the number of li - censes is limited in order to maintain the abovemarket price. Other times licenses are automatically granted to anyone wanting to operate a taxi. When taxi fares are set above market equilibrium, compare and contrast resource allocation under the restricted license system (assume the licenses are tradable) and the free-entry system. In which case will it be easier for customers to get a taxi? In which case will the amount of capital required to enter the taxi business be greater?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.