Office building maintenance plans involve stripping, waxing and buffing ceramic floor tiles. This work is often contracted out to maintenance firms and requires basic technology and labor. The supply and demand conditions for this service in St. Paul, Minnesota are modeled by the equations QS = -190 + 7P and QD = 140 - 7P, where Q is thousands of hours of floor reconditioning per month and P is price per hour. Solving the equations for market equilibrium, where supply equals demand, yields an equilibrium price of $23.57 per hour.

1. Office building maintenance plans call for the stripping, waxing, and buffing of ceramic floor
tiles. This work is often contracted out to office maintenance firms, and both technology and
labor requirements are very basic. Supply and demand conditions in this perfectly competitive
service market in St. Paul, Minnesota, are: QS = -190 + 7P (Supply) QD = 140 - 7P (Demand)
where Q is thousands of hours of floor reconditioning per month, and P is the price per hour.
Find the market equilibrium price. Note: To be at equilibrium, QS must equal QD
Solution
for market equilibrium QS = QD
so -190+7P = 140-7P
==> 14P = 330
==> P =23.57
market equilibrium price = 23.57