A-LevelEconomicsThe price system and the microeconomy9708/12 · Feb/Mar 2019 · Q71 Mark
A taxi firm raises fares at its busiest times by as much as five times the normal fare. Taxi drivers and customers are notified of the changes by mobile (cell) phone. What will result from this policy?
AIt will be less likely that there is a market equilibrium.
BPotential customers will have less perfect information.
CThe market surplus will become a shortage.
DThe supply of taxi rides will become more price elastic.
✓ Correct answer
D: The supply of taxi rides will become more price elastic.
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