The daily demand for hotel rooms on Miami in Florida is given by the equation Qd=...

The daily demand for hotel rooms on Miami in Florida is given by the equation Qd= 150,000 – 275P. The daily supply of hotel rooms on Miami is given by the equation Qs= 25,000 +312.5P. Diagram these demand and supply curves in the price. What is the equilibrium price and quantity of hotel rooms on Miami?

Expert Solution

Qd= 150,000- 275P

When P=0, Q=150,000

When Q=0. P=545.45

By plotting this we get the demand curve.

Qs= 25,000 + 312.5 P

When P=0 , Q=25,000

By plotting this we get the supply curve.

At equilibrium Qd=Qs, we get :

150,000-275P = 25,000 + 312.5P

125000 = 587.5P

P= 212.76 (Equilibrium price)

Q= 150,000- 275(212.76)

Q= 150000- 58509 = 91491 (Equilibrium quantity)

Rahul Sunny answered 2 years ago

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