Question: The supply curve is given by Q s = 200 + 20P x 5P 1 + 0.5P Z where Qs=quantity supplied of good X P

The supply curve is given by Q_s= –200 + 20P_x 5P₁ + 0.5P_Z where Qs=quantity supplied of good X P_x = price of good X P_j= price of inputs to good X P_z = price of good Z

a. Based on the supply curve above, what is the relationship between good X and good Z?

b. What is the equation of the supply curve if input prices are $10 and the price of Z is $20?

c. Graph the supply curve that you found in (b), showing intercepts and slope.

d. What is the minimum price at which the firm will supply any of good X at all?

e. If the price of good X is $25, what is the quantity supplied? Show this point on your supply curve.

f. Now suppose the price of inputs falls to $5. Graph the new supply curve.

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