Find the price below which the firm will go out of business

Reference no: EM13222247

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:

QS = 2P - 20 (Supply)

QD = 80 - 2P (Demand)

A. Algebraically determine the market equilibrium price/output combination.

Where Q is thousands of hours of floor reconditioning per month, and P is the price per hour.

B. Use a graph to confirm your answer.

For the graph, use PRICES: 10, 20,30,40,50,60,70,80,90

and QUANTITIES:5,10,15,20,25,30,35,40,45,50,55,60,65

Make sure to calculate each new QS and QD using the above prices(10,20,30,40,50,60,70,80,90). The solutions will also be a part of your graph.

C. Find the price below which the firm will go out of business.

D. What is the firm's long run supply curve?

Reference no: EM13222247

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