Suppose the suply function of product x is given by

Harold Kessler

Harold Kessler

Answered question

2021-12-19

Suppose the suply function of product x is given by QxS=30+2Px4Pz
a. how much of product x is produced when Px=$80 and Pz=$60
b. Pz=$60. Determine the supply function and inverse supply function for good x.

Answer & Explanation

Barbara Meeker

Barbara Meeker

Beginner2021-12-20Added 38 answers

a) Below is a supply function for product x.
QxS=300+2Px4pz 
Assuming that good X costs $80 and good Y costs $60, the quantity supply of good X is determined as follows.
QxS=30+2Px4Pz 
QxS=30+2(80)4(60) 
QxS=30+160240 
QxS=110 
The quantity supply of good is X is -110 units. Since quantity is negative, X-branded goods cannot be produced.
b) Suppose the price of good Z is $60 the supply functions= for good X is shown below. 
QxS=30+2Px4Pz 
QxS=30+2Px4(60) 
QxS=30+2Px240 
QxS=2Px270 
The supply function is QxS=2Px270

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