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) Suppose now that pf = $120 per kg. Draw the new supply curve based on this new price of fertilizer with the old supply curve where the price of fertilizer per kg in US dollar is $80 per kg. Show the direction 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 with the old supply curve where the price of fertilizer per kg in US dollar is $80 per kg. Show the direction of movement on the supply curve and explain how this change affect the supply.
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) Suppose now that pf = $120 per kg. Draw the new supply curve based on this new price of fertilizer with the old supply curve where the price of fertilizer per kg in US dollar is $80 per kg. Show the direction 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 with the old supply curve where the price of fertilizer per kg in US dollar is $80 per kg. Show the direction of movement on the supply curve and explain how this change affect the supply.
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...
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Transcribed Image Text: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) Suppose now that pf = $120 per kg. Draw the new supply curve based on this new price of fertilizer
with the old supply curve where the price of fertilizer per kg in US dollar is $80 per kg. Show the
direction 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 with
the old supply curve where the price of fertilizer per kg in US dollar is $80 per kg. Show the direction of
movement on the supply curve and explain how this change affect the supply.
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