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Speedy Limo is a limousine service located on the north side of Indianapolis. It specializes in transporting people to and from Indianapolis airport, although it will deliver people anywhere in the Indianapolis area. It competes with taxis and public transportation as well as people deciding to drive their own cars. The demand for the firm's services has been increasing as more consumers use the service for convenience and due to higher parking rates at the airport. However, increases in gasoline prices and wage rates for drivers have increased costs for the firm. Describe the supply and demand shifts that are occurring for this firm (graphs might help in your description).
What would happen to the demand curve if the major taxi companies lowered their prices? If you were asked to forecast future demand for this firm, how would you set up a forecasting model?
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