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Several cities regulate the taxi industry by licensing cabs. These licenses are often called medallions because they are issued in the form of a metal shield that must be affixed to hood of the cab, where enforcement officials can easily see it. Furthermore, most cities regulate the fares that taxis can charge, while taxi medallions are sold and bought in the free market. Suppose you are elected a City Council Person. At a city council meeting, the Taxi Cab Owners Association argued for a far increase. They note that the market price to buy or rent taxi medallions has been rising, and with these higher costs, profitability is reduced.
Evaluate this argument, and decide your vote whether to approve a fare increase or not proposed by the Taxi Cab Owners Association.
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