Question

5. Just as demand depends on the price of a good, the quantity supplied is also closely related to the price. The following table, called as the supply schedule, describes the amount of ice creams that the seller, Ben, provides depending upon its price. a) Complete the table. The price of ice cream in the amount of ice cream (x,y)=(Q.P) dollar (P) or (y) provided (Q) or (x) 1.00 1.50 2.00 2.50 3.00 b) Identify independent and dependent variables? What trend of quantity of supply do you observe? Explain in few sentences 6. Finding equation of a supply curve: a) Use x-axis for the quantity supplied (Q) and y-axis for the price (P), write each ordered pair (x, y) in the chart above. Plot the points and draw the graph of price and quantity supplied by joining them. The graph obtained is called a supply curve. b) Assuming that the trend is linear, use any two pairs of points on chart in Q-5a) to find the equation of the graph.

Please help ASAP this project is due tomorrow morning please!!!

Answer 1

Assuming a linear relationship between the price and the quantity supplied, we can write quantity supplied as a function of price as : Q = mP + c ------(i)

where, Q=quantity supplied,

P = price

m =slope of supply curve,

c= constant

Now, we have two points on Supply curve given in the question : (Q, P) : (1,1); (4,1.5)

Substituting these two values in equation (i), we will get, m = 6 and c = -5.

Thus, the supply curve equation can be written as Q = 6P - 5 or P = Q/6 + 5/6  (Answer of part 6(b))

Now, using this supply curve, we can fill the table as follows:

The price of ice cream in dollar (P) or (y)	The amount of ice cream provided (Q) or (x)
1.0	1
1.5	4
2.0	7
2.5	10
3.0	13

Here, dependent variable id quantity supplied and independent variable is Price. From the above table, we can observe that as price of ice cream increases, its quantity supplied also increases. Thus, there is a direct positive relationship between quantity supplied and price. (Answer of part 5(b))

Supply Curve - 5.0 The price of ice cream in dollar (P) or (y) 10 15 The amount of ice cream provided (Q) or (x)