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Consider the following graph of a supply curve: Price P=Y Axis Quantity Q= X Axis Units of Y B ✓ C 6 C. 2 3 9 Units of X 12 Write the linear equation and compute the slope and the intercept b. Write the equation for the 45 degree line starting at zero. Is this line above or below the supply curve? What would be the price for a supplied amount of 14?

Consider the following graph of a supply curve: Price P=Y Axis Quantity Q= X Axis Units of Y B ✓ C 6 C. 2 3 9 Units of X 12 Write the linear equation and compute the slope and the intercept b. Write the equation for the 45 degree line starting at zero. Is this line above or below the supply curve? What would be the price for a supplied amount of 14?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Consider the following graph of a supply curve: Price P=Y Axis Quantity Q= X Axis Units of Y 2 C. D 3 6 B 9 Units of X 12 Write the linear equation and compute the slope and the intercept b. Write the equation for the 45 degree line starting at zero. Is this line above or below the supply curve? What would be the price for a supplied amount of 14?
Transcribed Image Text:Consider the following graph of a supply curve: Price P=Y Axis Quantity Q= X Axis Units of Y 2 C. D 3 6 B 9 Units of X 12 Write the linear equation and compute the slope and the intercept b. Write the equation for the 45 degree line starting at zero. Is this line above or below the supply curve? What would be the price for a supplied amount of 14?
Expert Solution
Step 1

We know that the general equation of the linear supply curve is as Q=a+bP  ......... ( 1)

where a and b are arbitrary constants.

From the given graph, at price $2, the quantity supplied is 3

At point $4, the quantity supplied is 6.  and so on 

We will put these values of P and Q in equation 1 and then calculate the value of a and b. 

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