Answer to Question #219933 in Microeconomics for Ishaq

Question

A Professor of Economics from the Department of Economics Education of the Faculty of Social Sciences Education of the University of Education, Winneba, has estimated the demand and supply functions for students’ accommodation on campus to be respectively:

10P + 3Q = 60 and

P = Q – 0.5

Further, the professor claims that the average cost of Hostel operators is

Answer 1

Demand function

10P+3Q=60

Supply function

P=Q-0.5

=10(Q-0.5)+3Q=60

13Q-5=60

13Q=60+5

13Q=65

Q=5

P=5-0.5=4.5