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Question: Business is booming for Consulting Services, Inc. (

Business is booming for Consulting Services, Inc. (CSI), a local supplier of computer set-up consulting services. The company can profitably employ technicians as quickly as they can be trained. The average hourly rate billed by CSI for trained technician services and the number of billable hours (output) per quarter over the past six quarters are as follows:
Business is booming for Consulting Services, Inc. (CSI), a local supplier of computer set-up consulting services. The company can profitably employ technicians as quickly as they can be trained. The average hourly rate billed by CSI for trained technician services and the number of billable hours (output) per quarter over the past six quarters are as follows:


Quarterly demand and supply curves for CSI services are

                                      QD	=  4,000 - 200P + 2,000T	(Demand),
                                      QS	=  -2,000 + 200P	(Supply),

where Q is output, P is price, T is a trend factor, and T = 1 during Q-1 and increases by one unit per quarter.
a. Express each demand and supply curve in terms of price as a function of output.
b. Plot the quarterly demand curves for the last six quarterly periods. (Hint: Let T = 1 to find the intercept for Q-1, T = 2 for Q-2, and so on.)
c. Plot the CSI supply curve on the same graph.
d. What is this problem's relation to the identification problem?

Quarterly demand and supply curves for CSI services are QD = 4,000 - 200P + 2,000T (Demand), QS = -2,000 + 200P (Supply), where Q is output, P is price, T is a trend factor, and T = 1 during Q-1 and increases by one unit per quarter. a. Express each demand and supply curve in terms of price as a function of output. b. Plot the quarterly demand curves for the last six quarterly periods. (Hint: Let T = 1 to find the intercept for Q-1, T = 2 for Q-2, and so on.) c. Plot the CSI supply curve on the same graph. d. What is this problem's relation to the identification problem?





Transcribed Image Text:

Q-1 Q-2 Q-3 Q-4 Q-5 Q-6 Hourly rate ($) $20 $25 $30 $35 $40 $45 Billable hours 2,000 3,000 4,000 5,000 6,000 7,000


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