Q: The estimated supply functions for avocados is:Qs=100 p- 80 -0.25PfwhereQs is quantity supplied (in thousand kilograms)- p is the price of avocado per kg in US dollar-pf is the price of fertilizer per kg in US dollar and is $80 per kg.Suppose that selling price of avocado per kg is $5a) Suppose now that pf = $120 per kg. Draw the new supply curve based on this new price of fertilizerwith the old supply curve where the price of fertilizer per kg in US dollar is $80 per kg. Show thedirection of movement on the supply curve and explain how this change affect the supply.b) Suppose now that pf = $40 per kg. Draw the new supply curve based on this new price of fertilizer withthe old supply curve where the price of fertilizer per kg in US dollar is $80 per kg. Show the direction ofmovement on the supply curve and explain how this change affect the supply.

Given:Supply function: Qs = 100p - 80 - 0.25PfPf = 80P = $5Let's graph the original supply…

Answered: Q: The estimated supply functions for…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Q: The estimated supply functions for avocados is: Qs 100 p 80 - 0.25 pf where Qs is quantity supplied (in thousand kilograms) - p is the price of avocado per kg in US dollar - pf is the price of fertilizer per kg in US dollar and is $80 per kg. Suppose that selling price of avocado per kg is $5 a) Calculate the impact of unit change in price on quantity supplied. Explain your result. Pay attention to unit in your explanation. b) Suppose kg price of avocados goes up by $3. How much the quantity supplied would increase? Show it on a supply diagram and explain your result. c) Now suppose kg price of avocados decreases by $2. How much the quantity supplied would decrease? Show it on a supply diagram and explain your result. d) Calculate the necessary change in price (slope of supply curve) that we should have for a unit change in quantity supplied. Explain your result. e) Using the formula for the slope of the supply curve, calculate how much price should change if we want to increase the…
Suppose that the demand curve for corn has the equation p= -0.22q +7.774 and the supply curve for corn has the equation p = 0.2q +3.7, where p is the price per bushel in dollars and q is the quantity (demanded or produced) in billions of bushels. (a) Find the quantities supplied and demanded when the price of corn is $4.60 per bushel. (b) Determine the quantity of corn that will be produced and the price at which it will sell. (a) The quantity supplied when the price of corn is $4.60 is (Round to the nearest whole number as needed.) billion bushels.
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The supply of Pespi is given by the following equation: Q p S = −24 + 6Pp + Pc + 2Pw where Q p S is the quantity of Pespi supplied, in millions of litres, Pp is the price of Pespi per litre, Pc is the price of Coek per litre; and Pw is the price of the water used to make the products per litre. (c) What will happen to the supply of Pespi if the price of Coek increases to $6 per litre? Graph the new inverse supply carefully and indicate the new choke price. (d) Suppose instead that the price of Coek remains $4, but the price of water decreases to $1. What will happen to the supply of Pespi as a result?

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