Question

If demand curve for house cleaning services is d = 45000 - 21p and supply curve is s = 15000 + 9p, find the equilibrium quantity

Answer 1

Solution :-

Demand curve for house cleaning services is Qd = 45000 - 21p

And the supply curve is Qs = 15000 + 9p

Now, since equilibrium occurs where Qd = Qs. We can solve for the price that does this by setting the function equal to each other.

Qd = Qs 

⇒ 45000 - 21p = 15000 + 9p

⇒ - 21p - 9p = 15000 - 45000

⇒ - 30 p = - 30000

⇒ 30p = 30000

⇒ p = 30000/30

⇒ p = Rs. 1000

We now know that the equilibrium price in the market, the price that causes quantity demanded to be equal to quantity supplied, is Rs. 1000 per unit.

Now, substituting the value of p = 1000 in Qd = 45000 - 21p.

⇒ 45000 - 21*1000

⇒ 45000 - 21000

Qd = 24000 units

Therefore, the equilibrium quantity is 24000 units with the price of each being Rs. 1000.

Answer.