Description of this paper

monthly demand and supply for a computer support service

Description

solution


Question

The following relations describe monthly demand and supply for a computer support service catering to small businesses;Qd=3,000 -10 P;Qs=-1,000+ 10P;where Q is the number of businesses that need services and P is the monthly fee, in dollars.;a) At what average monthly fee would demand equal zero?;b) At what average monthly fee would supply equal zero?;c) Plot the supply and demand curves.;D) What is the equilibrium price/output level?;e) Suppose demand increases and leads to a new demand curve;Qd=3,500 - 10P;what is the effect on supply? What are the new equilibrium P and Q?;f) Suppose new suppliers enter the market due to the increase in demand so the new supply curve is Q= -500 + 10P. What are the new equilibrium price and equilibrium quantity?;G) Show these changes on the graph.

 

Paper#28206 | Written in 18-Jul-2015

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