Chapter 4, Problem 12P

To determine

a.

To prepare:

Demand and Supply graph for uber rides in Miami and show change in demand of uber on Friday night and change in supply.

Introduction:

The quantity of the rides needed for the ride at a particular price in a given time frame is known as the demand for the rides. And the rides made available to the riders at that time frame is known as the supply for the rides.

To determine

b.

Behavior of consumer and producer surplus without surge pricing.

Introduction:

When the prices for the rides are increased due to high demand and limited supply, it is known as the surge pricing.

To determine

c.

Effect of surge pricing on consumer and producer surplus.

Introduction:

When the prices for the rides are increased due to high demand and limited supply, it is known as the surge pricing.