1. Consider the market supply curve which passes through the intercept and from which the market equilibrium data is known, this is, the price and quantity of equilibrium π·π¬=ππ and πΈπ¬=ππππ.
a. Considering those two points, find the equation of the supply.
b. Draw a graph of this line.
2. Considering the previous supply line, determine if the following demand function corresponds to the market demand equilibrium stated above. πΈπ«=ππππβππ.
3. The production function of a firm is described by the following equation πΈ=ππ,ππππ³βππ³ π where L stands for the units of labor.
a) Draw a graph for this equation. Use the quantity produced in the y-axis and the units of labor in the x-axis.
b) What is the maximum production level?
c) How many units of labor are needed at that point?
4. Solve the following system of equations.
50π₯+20π¦=1800 10π₯+3π¦=300
The equation is (2000,50)
To find the slope we do as follows
or Q=40P
The above is the supply equation.
The graph of this line is as shown below
Considering the previous supply line;
To find equilibrium, we equate it to the given Qd.
From this result the Qd does not correspond to the market equilibrium.
Solving the equations simultaneously
Multiply equation 2 by 5
Solving for x
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