Assignment: Managerial Economics
The following relations describe monthly demand and supply for a computer support service catering to small businesses.
QD=3,000-10PQS=-1,000+10P
where Q is the number of businesses that need services and P is the monthly fee, in dollars.
• At what average monthly fee would demand equal zero?
• At what average monthly fee would supply equal zero?
• Plot the supply and demand curves.
• What is the equilibrium price/output level?
• Suppose demand increases and leads to a new demand curve:
QD=3,500-10P
• What is the effect on supply? What are the new equilibrium P and Q?
• Suppose new suppliers enter the market due to the increase in demand so the new supply curve is Q = - 500 + 10 P. What are the new equilibrium price and equilibrium quantity?
Format your assignment according to the give formatting requirements:
• The answer must be using Times New Roman font (size 12), double spaced, typed, with one-inch margins on all sides.
• The response also includes a cover page containing the student's name, the title of the assignment, the course title, and the date. The cover page is not included in the required page length.
• Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.