Question

The supply function for good X is given by Q x s = 200 + 4P X - 3P Y - 5P W, where P X is the price of X, P Y is the price of good Y and P W is the price of input W. If P X = 500, P Y = 250, P W = 30, then the supply curve is___________.

a. Qxs = 1300.b. Qxs = -700 + 4Px.c. Qxs = -550 + 4Px.d. Qxs = 150 + 4Px.

Answer 1

Answer: 1300

Explanation:

From the equation,

Qxs = 200 + 4Px - 3Py - 5Pw

where

Px = price of X = 500

Py = price of y = 250

Pw = price of input w = 30

Putting the figures back into the supply equation, we have:

Qxs = 200 + 4Px - 3Py - 5Pw

= 200 + 4(500) - 3(250) - 150

= 200 + 2000 - 750 -150

Qxs = 1300

Answer 2

Answer:

a. Qxs = 1300

Explanation:

Given the function Qxs = 200+ 4PX -3PY-5PW is the supply function.

Thereafter we are given the prices of X,Y and input W which are: PX=500 , PY= 250 and PW =30 respectively, then we are also told that PW is the price of input W, PX is the price of X and PY is the price of Y.

Already we have the supply function so we just substitute the given prices on the supply function to get the value of supply/ supply function at these given prices:

 

Qxs  = 200 + 4(500) -3(250) -5(30)  we substitute the given values on the supply function provided which is Qxs = 200+4PX -3PY- 5PW to get the supply unction at these given prices.

Qxs = 1300 therefore if you insert the values on a calculator you will get 1300 as the supply function at these given values.