At NEW YORK Terminal there is a car park for buses that receive arriving passengers. The car park is so small that many buses cannot pass at the same time. Therefore, the government decided to grant a certain number of bus companies a license to operate their buses in the car park and thus they have one license to run between the airport and Downtown NYC with passengers. Such permits have now been allocated and not everyone got what they wanted. a) Show in the pictures what effect this barrier of entry has on consumer benefits and producer benefits for business benefits and how these restrictions affect market prices. Show on a picture. It is assumed that the marginal costs of the companies are traditional, increasing and the average cost is U-shaped. Show the companies' profits in a picture.
At NEW YORK Terminal there is a car park for buses that receive arriving passengers. The car park is so small that many buses cannot pass at the same time. Therefore, the government decided to grant a certain number of bus companies a license to operate their buses in the car park and thus they have one license to run between the airport and Downtown NYC with passengers. Such permits have now been allocated and not everyone got what they wanted.
a) Show in the pictures what effect this barrier of entry has on consumer benefits and producer benefits for business benefits and how these restrictions affect market prices. Show on a picture. It is assumed that the marginal costs of the companies are traditional, increasing and the average cost is U-shaped. Show the companies' profits in a picture.
Step by step
Solved in 2 steps with 1 images
