F in the long run how do plr qlr and qlr compare to p

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f. In the long run, how do P(LR), q(LR), and Q(LR) compare to P*, q*, and Q*? Explain graphically.
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PART II: USE BLUEBOOK II. Note: Show your work. Draw clear graphs. Q2. (30 points) Please write your answer in bluebook #2. The previous question assumed that taxis are active in a perfectly competitive market. However, you learn that a taxi must display a City Medallion and only a limited number of these are available. You therefore decide to model the industry (pre-Uber) as a monopoly. a. Why is Monopoly a more appropriate model than Perfect Competition in this case? Use the basic monopoly graph to answer part b: b. Under this new assumption can you find the long run price and quantity? Explain. You lean that Uber cars do not need a City Medallion to operate. c. With this new information, what model would you suggest to study the industry? Why is this the appropriate model? d. With the invention of Uber, what should happen to the profit of taxis in the long run? e. Re draw the graph adding a demand curve that is consistent with long run equilibrium. f. The Taxi industry is loudly apposed to Uber and is spending large amounts of money to lobby against it. Is your analysis in short answer questions 1 and 2 consistent with their actions? Explain.
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