Question

As a result of high wage settlement in New York city due to taxi strike of several years ago, taxi owners increased taxi fares . Was that a right decision

Answer 1

your decision is right

Answer 2

This question is hypothetical in nature and can be answered on the theory of economics called elasticity of demand.

The wage raise will increase cost which will increase rate to both consumers and taxi drivers based on elasticity.

If the demand is in elastic, the burden will go to the consumers.

But if the supply is inelastic, the burden will go to the taxi drivers.

However, if the fare goes beyond the market standard, people may stop hiring taxi and that will reduce the income of the taxi driver.