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Equilibrium Prices and Quantity

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Lawn mowing services are supplied by a host of individuals in the suburb of Westbrook. Demand and supply conditions in the perfectly competitive domestic for lawn mowing services are:

P = $75 - 1.75QD
(Demand)

P = $2QS
(Supply)

where P is price per lawn mowed and Q is quantity of lawns mowed per day.

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

B. Confirm this by graphing industry demand and supply curves.

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Solution Summary

The solution describes the steps for determining equilibrium price and quantity for lawn mowing services. Solution is determined algebraically and graphically.

Solution Preview

Please refer attached file for graphs.

Solution:

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

P = $2QS ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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