Question

Under freely competitive markets, the market clearing prices and quantities of taxi rides are given by: $10 and 4,000, respectively. To protect producers, the government imposes a production quota of 1,000 rides. As a result of the quota, consumers are required to pay $15 per ride, while producers are willing to accept a minimum price of $5 per ride.


Based on this information, the quota rent is

Answer 1

Based on this information, the quota rent is: 15 - 5 = $10.