Series 79 practice questionhardIndustry Trends – Disruptive Technology
An investment banker analyzing the taxi industry notes a sharp decline in traditional taxi medallion values despite steady urban populations. Which of the following market trends best explains this phenomenon?
- AEntry of ride-sharing platforms lowering barriers to entry✓ Correct answer
- BIncreased regulation on taxi services
- CRising fuel prices
- DPopulation migration to suburbs
Explanation
Why A — Entry of ride-sharing platforms lowering barriers to entry
Ride-sharing platforms have disrupted the market by lowering barriers to entry, reducing the value of restricted taxi medallions. Regulation, fuel prices, and population shifts do not explain the sharp devaluation in the presence of flat urban populations.
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