Principle of economics , Microeconomics

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A city government regulates taxi fares.  It also limits the number of taxicabs (by licensing), and has not changed the limit on cabs for lot of years.  At one time vacant taxis were scarce and hard to serach; but when the city enhanced the allowable fares 25 percent, vacant taxis suddenly became plentiful.  The result is BEST explained by the economic principle of.

 


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