How M financials benefit from the number of New York taxi medallions Concept Introduction Quantity Control or Quota: The government intervenes by specifying a limit of quantity that can be bought or sold in the market. The quantity of goods or services that can be bought or sold under such system is known as quota limit.

Question

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Answer 1

Question

Chapter 5, Problem 1BCQ

To determine

How M financials benefit from the number of New York taxi medallions

Concept Introduction

Quantity Control or Quota: The government intervenes by specifying a limit of quantity that can be bought or sold in the market. The quantity of goods or services that can be bought or sold under such system is known as quota limit.

Expert Solution & Answer

Explanation of Solution

M Financials was engaged in the business of renting the M cars to the drivers.

Later on, the number of taxis of M got restricted and hence, the profits of M Financials also got restricted as a result.

Thus, M Financials shifted its business from renting of cars to financing the cars for new buyers.

M Financials benefitted from the restrictions on the number of taxis because it shifted its business to financing the cars. From the new business it made profit in the form of interest on loan.

More the cost of cars, more the interest and more will be the profits of M Financials.

Over the years, the price of the car doubled and thus, the profits of M Financials also doubled.

Moreover, the shares of M Financials rose up to 120%.

Conclusion:

Thus, M Financials benefitted from the restriction on the number of taxis.

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Answer 2

Question

Chapter 5, Problem 1BCQ

To determine

How M financials benefit from the number of New York taxi medallions

Concept Introduction

Quantity Control or Quota: The government intervenes by specifying a limit of quantity that can be bought or sold in the market. The quantity of goods or services that can be bought or sold under such system is known as quota limit.

Expert Solution & Answer

Explanation of Solution

M Financials was engaged in the business of renting the M cars to the drivers.

Later on, the number of taxis of M got restricted and hence, the profits of M Financials also got restricted as a result.

Thus, M Financials shifted its business from renting of cars to financing the cars for new buyers.

M Financials benefitted from the restrictions on the number of taxis because it shifted its business to financing the cars. From the new business it made profit in the form of interest on loan.

More the cost of cars, more the interest and more will be the profits of M Financials.

Over the years, the price of the car doubled and thus, the profits of M Financials also doubled.

Moreover, the shares of M Financials rose up to 120%.

Conclusion:

Thus, M Financials benefitted from the restriction on the number of taxis.

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Answer 3

Question

Chapter 5, Problem 1BCQ

To determine

How M financials benefit from the number of New York taxi medallions

Concept Introduction

Quantity Control or Quota: The government intervenes by specifying a limit of quantity that can be bought or sold in the market. The quantity of goods or services that can be bought or sold under such system is known as quota limit.

Expert Solution & Answer

Explanation of Solution

M Financials was engaged in the business of renting the M cars to the drivers.

Later on, the number of taxis of M got restricted and hence, the profits of M Financials also got restricted as a result.

Thus, M Financials shifted its business from renting of cars to financing the cars for new buyers.

M Financials benefitted from the restrictions on the number of taxis because it shifted its business to financing the cars. From the new business it made profit in the form of interest on loan.

More the cost of cars, more the interest and more will be the profits of M Financials.

Over the years, the price of the car doubled and thus, the profits of M Financials also doubled.

Moreover, the shares of M Financials rose up to 120%.

Conclusion:

Thus, M Financials benefitted from the restriction on the number of taxis.

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Answer 4

Question

Chapter 5, Problem 1BCQ

To determine

How M financials benefit from the number of New York taxi medallions

Concept Introduction

Quantity Control or Quota: The government intervenes by specifying a limit of quantity that can be bought or sold in the market. The quantity of goods or services that can be bought or sold under such system is known as quota limit.

Expert Solution & Answer

Explanation of Solution

M Financials was engaged in the business of renting the M cars to the drivers.

Later on, the number of taxis of M got restricted and hence, the profits of M Financials also got restricted as a result.

Thus, M Financials shifted its business from renting of cars to financing the cars for new buyers.

M Financials benefitted from the restrictions on the number of taxis because it shifted its business to financing the cars. From the new business it made profit in the form of interest on loan.

More the cost of cars, more the interest and more will be the profits of M Financials.

Over the years, the price of the car doubled and thus, the profits of M Financials also doubled.

Moreover, the shares of M Financials rose up to 120%.

Conclusion:

Thus, M Financials benefitted from the restriction on the number of taxis.

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Answer 5

Chapter 5, Problem 1BCQ

To determine

How M financials benefit from the number of New York taxi medallions

Concept Introduction

Quantity Control or Quota: The government intervenes by specifying a limit of quantity that can be bought or sold in the market. The quantity of goods or services that can be bought or sold under such system is known as quota limit.

Expert Solution & Answer

Explanation of Solution

M Financials was engaged in the business of renting the M cars to the drivers.

Later on, the number of taxis of M got restricted and hence, the profits of M Financials also got restricted as a result.

Thus, M Financials shifted its business from renting of cars to financing the cars for new buyers.

M Financials benefitted from the restrictions on the number of taxis because it shifted its business to financing the cars. From the new business it made profit in the form of interest on loan.

More the cost of cars, more the interest and more will be the profits of M Financials.

Over the years, the price of the car doubled and thus, the profits of M Financials also doubled.

Moreover, the shares of M Financials rose up to 120%.

Conclusion:

Thus, M Financials benefitted from the restriction on the number of taxis.

Answer 6

Chapter 5, Problem 1BCQ

To determine

How M financials benefit from the number of New York taxi medallions

Concept Introduction

Quantity Control or Quota: The government intervenes by specifying a limit of quantity that can be bought or sold in the market. The quantity of goods or services that can be bought or sold under such system is known as quota limit.

Expert Solution & Answer

Explanation of Solution

M Financials was engaged in the business of renting the M cars to the drivers.

Later on, the number of taxis of M got restricted and hence, the profits of M Financials also got restricted as a result.

Thus, M Financials shifted its business from renting of cars to financing the cars for new buyers.

M Financials benefitted from the restrictions on the number of taxis because it shifted its business to financing the cars. From the new business it made profit in the form of interest on loan.

More the cost of cars, more the interest and more will be the profits of M Financials.

Over the years, the price of the car doubled and thus, the profits of M Financials also doubled.

Moreover, the shares of M Financials rose up to 120%.

Conclusion:

Thus, M Financials benefitted from the restriction on the number of taxis.

Answer 7

Chapter 5, Problem 1BCQ

To determine

How M financials benefit from the number of New York taxi medallions

Concept Introduction

Quantity Control or Quota: The government intervenes by specifying a limit of quantity that can be bought or sold in the market. The quantity of goods or services that can be bought or sold under such system is known as quota limit.

Answer 8

Expert Solution & Answer

Explanation of Solution

M Financials was engaged in the business of renting the M cars to the drivers.

Later on, the number of taxis of M got restricted and hence, the profits of M Financials also got restricted as a result.

Thus, M Financials shifted its business from renting of cars to financing the cars for new buyers.

M Financials benefitted from the restrictions on the number of taxis because it shifted its business to financing the cars. From the new business it made profit in the form of interest on loan.