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The demand and supply for hotel rooms in a city is given by Qd=100-5P Qs=5P What is the price and number of rooms sold? Suppose

  1. The demand and supply for hotel rooms in a city is given by

Qd=100-5P

Qs=5P

  1. What is the price and number of rooms sold?
  2. Suppose the city puts a $10 tax on rooms that must be paid by the hotelier:

Qs=5(P-T)

What is the price to the hotelier, travelers, and number of rooms?

  1. What is the loss of wealth (dead weight loss)?

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