Assume the supply curve is given by:
Qs = -200 +20Px -5Pi + 0.5Pz
Where:
Px= price of good X
PI=price of inputs to good X
Qs= quantity supplied of good X
Pz=price of good Z
1. Determine the equation of the supply curve if input prices are $10 and the price of Z is $20?
2. Graph the supply curve that you found in part 1) showing intercepts and slope.
3. Determine the minimum price at which the firm will supply any of good X at all?
4. If the price of good X is $25, determine the quantity supplied. Label this point on your graph.
5. Assume the price of inputs falls to $5. Graph the new supply curve.