Answer to Question #135164 in Microeconomics for Blue

Question

You are given a specific supply schedule
Qsx=20Px;where Qsx is the quantity supplied and Px is the price per unit.
a)derive the producer's supply schedule
b) derive the producer's supply curve
c) what things have been kept constant in the given supply function
d)what is the minimum price that this producer must be offered in order to induce him to start supplying good X to the market?

Answer 1

a)derive the producer's supply schedule

It is a statement in the form of a table that shows the different quantities of a commodity that a firm or a producer offers for sale in the market at different prices.

Producer's supply schedule is a supply schedule that depicts the supply by an individual firm or producer of a commodity in relation to its price. Let us understand it given that $Qsx=20Px$.

Taking $Qsx$ to be $100$

$Qsx=20Px\\ 100=20Px \implies Px=\frac{100}{20} \implies Px=5$

we will take $Qsx$ on a range of $100 - 500$

b) derive the producer's supply curve

In supply function, quantity supplied is expressed as a function of various variables.

$$S_X = f(P_X, C_X, T_X)$$

Where,

$S_X$ = Quantity supplied

$P_X$ = Price of the commodity

$C_X$ = Cost of production

$T_X$ = Technology of production

c) what things have been kept constant in the given supply function

1. Cost of the factors of production
2. Change in technology
3. Price of related goods
4. Change in the number of companies in the industry
5. The goal of a business firm
6. Natural Factors

d)what is the minimum price that this producer must be offered in order to induce him to start supplying good X to the market?

The above schedule depicts the individual supply schedule. We can see that when the price of the commodity is 5, its supply is 100 units. Similarly, when its price is 25, its supply increases to 500 units.