Distinguish between a competitive market and a noncompetitive market

In order to operate as a taxi driver, drivers must obtain limited ‘medallions’ issued by the city. These permits are very expensive, in some cases costing about $200,000. In addition, drivers and their vehicles must meet costly safety requirements that cut into their profits. With the advancement of smartphones, people can now request a driver to take them from point A to point B. These drivers use their private vehicle to operate like a taxi. 1. Distinguish between a competitive market (i.e. perfecVmonopolistic competition) and a noncompetitive market (monopoly). What characterizes each market structure? What are some positives and negatives about each? In the case of taxis, what are the barriers to entry? 2. According to the articles you read, what are the arguments provided by taxi drivers for why ride sharing services need to be monitored? What do ride sharing services such as Uber and Lyft argue in defense? Make reference to the articles in your essay; state the title of the articles. 3. In your opinion, should ride sharing services be allowed to operate freely without having to meet the same requirements as taxi drivers? Or should the government step in treat Uber and Lyft like a taxi company and require them to bid for one of the limited ‘medallions’ in a city? Is this a case of unfair competition? Or unwanted competition?

 

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