Problem 15 Supply Suppose the supply function for product X

Problem 15 – Supply

Suppose the supply function for product X is given by Q^s_x = -50 + 0.5P_x – 5P_z.

How much of product X is supplied when P_x = $500 and P_z = $30?

How much of product X is supplied when P_x = $250 and P_z = $10?

Must show work.

Solution

product X is supplied when Px = $500 and Pz = $30

Qsx = -50 + 0.5*500 - 5*30 = -50 + 250 - 150 = 50

product X is supplied when Px = $250 and Pz = $10

Qsx = -50 + 0.5*250 - 5*10 = -50 + 125 - 50 = 25