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The equation for the demand curve for hotel rooms in Boston is given by P = 5000-0.48Qd. The supply curve is given by P = 0.02Qs. Prices are nightly rates in dollars. Show your work
A. Graph the supply and demand curves.
B. If a price ceiling of $150per month were instituted in the city of Boston, what would be the new price and quantity of hotel rooms actually traded?
C. If a sales tax of $10 per night is instituted by the city of Boston to be collected from suppliers, what is the equilibrium price and quantity with the tax? Add this situation to your graph.
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