The market structure of taxi industry in NSW is a monopoly market, since there is almost no competition but a legal barrier to entry in the market. The structure is inefficient because of the DWL caused by excess demand and shortage of supply. In addition, the entry to taxi industry has been regulated though limiting the supply of taxi plates, and the price of taxi plates is extremely high due to its scarcity. This has significantly increased the fixed cost and marginal cost, as a consequent, the price of taxi services is extremely high. However, if allowing greater competition into the market, the market structure will become monopolistic competition due to the removal of entry barrier and the differentiation of the services from individual car owners or firms. As a result, the marginal cost and according the price would be much lower, and an increase in supply would reduce the excess demand and thus reduce the DWL. Therefore, a greater competition would make the market more efficient.