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Suppose a taxicab company is expected to earn annual above-normal profits of $10,000. Assume the interest rate is 5%.
a. Derive the price of a medallion if entry regulation is expected to continue forever.
b. Suppose a new technology, let's call it Uber, will be available in two years. Uber can provide the same services as the taxi without the need for a medallion (can avoid the entry regulation). Derive the change in price of a medallion in response to this new technology.
Is their product inexpensive or moderate or high prices? How do they compare to the same products in other countries?
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The "Market" section of the Bloomberg website provides interest rate quotations for numerous currencies. Its address is www.bloomberg.com.
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Elucidate what output level does average variable cost reach its minimum value. What is the value (in dollars) of the average variable cost at its minimum point.
1.nbspnbsp briefly define the following termsa.nbspnbspnbsp potential gdpb.nbspnbspnbsp long-run aggregate
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