Suppose the supply function for product X s given by QxS = -30 + 2P, - 4P. a. Ho

Question

Suppose the supply function for product X s given by QxS = -30 + 2P, - 4P. a. How much of product X is produced when P = $600 and P = $60? b. How much of product X is produced when P = $80 and P = $60? c. Suppose P = $60. Determine the supply function and inverse supply function for good X. Graph the inverse supply function. Supply function: QxS = +pX Inverse supply function: P = + QxS Instruction: Use the tool provided ?S?to graph the inverse supply function from Q = 0 to Qx = 200 (two points total).

Explanation / Answer

Quantity Supplied = Quantity Demanded in Equilibrium

Hence quantity to be produced with PX is 600 & PZ is 60 = -30 +2(600) –4(60) = 1200 – 270 = 930

Hence quantity to be produced with PX is 80 & PZ is 60 = -30 +2(80) –4(60) = 160 – 270 = -110

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