The equation for the demand curve for hotel rooms in the Boston is given by P = 5000-0.48Qd. The supply curve is given by the P = 0.02Qs. Prices are nightly rates in dollars.
1. Make a graph for the supply and demand curves.
2. Determine the equilibrium price and quantity?
3. Calculate the slope of the demand curve?
4. Find out the slope of the supply curve?
5. What would be the new price and quantity of hotel rooms actually traded if a price ceiling of $150per month were instituted in the city of Boston?
6. Determine the equilibrium price and quantity with the tax if a sales tax of $10 per night is instituted by the city of Boston to be collected from suppliers?