The supply of wheat is given by the following equation:

QWS = - 6 + 4 PW - 2 PC - PF

Where QWS

is the quantity of wheat supplied, in millions of bushels; PW is the price of wheat per bushel; PC is the price of corn per bushel; and PF is the price of tractor fuel per gallon.

a. Graph the inverse supply curve when corn sells for $4 a bushel and fuel sells for $2 a gallon. What is the supply choke price?

b. How much wheat will be supplied at a price of $4? $8?

c. What will happen to the supply of wheat if the price of corn increases to $6 per bushel? Explain intuitively; then graph the new inverse supply carefully and indicate the new choke price.

d. Suppose instead that the price of corn remains $4, but the price of fuel decreases to $1. What will happen to the supply of wheat as a result? Explain intuitively; then graph the new inverse supply. Be sure to indicate the new choke price.