Respuesta :
Decision based on cost Taxi elasticity involves XED value: Petrol price increases result in a shift in the demand for taxi drivers.
Briefing:-
They complement each other (negative XED value), the price is inelastic, and an increase in price has little to no impact on the demand for taxis.
However, if XED: elastic, a price rise will result in lower revenue as demand declines.
Smart choice if the reality of taxi services is that they are inelastic: alternatives (cars/Uber), which are likely to be elastic, = not a good choice.
What effect does the rise in fuel prices have on the economy?
Transport costs: As fuel prices rise, the cost of running bus and taxi services will also rise. The consumer pays for these expenses. Consumer goods: A rise in the cost of fuel has an impact on everything from product prices to logistical expenses.
To Know more about taxi drivers.
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