ECON 550 Assignment 2

ECON 550 Assignment 2 - Assignment2 ,waxing, tiles.,

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Assignment 2 Office building maintenance plans call for the stripping, waxing, and buffing of ceramic floor  tiles. This work is contracted out to maintenance firms, and both technology and labor  requirements are very basic. Supply and demand conditions in this perfectly competitive service market in New York are: Q S  = 2P - 20 (Supply) Q D  = 80 - 2P (Demand) - Where Q is thousands of hours of floor reconditioning per month, and P is the price per hour. A. Algebraically determine the market equilibrium price/output combination. Market equilibrium is when the quantity supplied equals the quantity  demanded, so set the two equations equal to each other:  QS=QD 2P - 20 = 80 - 2P Then solve for P:  4P = 100 P = 25 The equilibrium price is 25. The equilibrium quantity would be the quantity  supplied and demanded at this price; substitute 25 for P into each equation.

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This note was uploaded on 03/29/2012 for the course ECON 550 taught by Professor Gilbert during the Spring '12 term at DeVry Houston.

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ECON 550 Assignment 2 - Assignment2 ,waxing, tiles.,

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