Estimating the demand and supply curves

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Demand and Supply Curves.

The following relations describe monthly demand and supply relations for dry cleaning services in the metropolitan area:

QD = 500,000 - 50,000P (Demand)

QS = -100,000 + 100,000P (Supply)

where Q is quantity measured by the number of items dry cleaned per month and P is average price in dollars.

A. At what average price level would demand equal zero?

B. At what average price level would supply equal zero?

C. Calculate the equilibrium price/output combination.

Reference no: EM13967017

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