ajaz_eco_204_2012_2013_chapter_16_Market_Power

In essence the ama is restricting the supply of

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Unformatted text preview: S Congress under the Flexner Act) to grant/revoke med school licenses and the number of doctors “permitted” to graduate from licensed med schools per year. In essence, the AMA is restricting the supply of doctors in order to raise the “price of doctor services”. Here’s one health care cost driver that you never hear about. Gee, I wonder why? NYC & London cabs: These cities have various methods to limit the supply of taxi cabs. To operate a cab in NYC you need a “taxi medallion”. For the last 70 years, the number of medallions in NYC has remained fixed at about 12,487 medallions(!) in a city with a population close to 10 million3. To operate a cab in London you must pass an exam which requires you to memorize all streets in London (including where you can take left turns, one ways, etc.) and you are expected to, from memory, give the shortest route from point A to point B. The only issue is that this exam is still in place despite the fact that one can use a GPS system to get around! 3 Boston and Paris too have a l...
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This document was uploaded on 01/19/2014.

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