Question

A company provided the following information regarding the prices and quantities demanded and supplied for product X:

P         Q1         Q2
12     124         200
16     134         192
20     144         184
24     154         176

Given this information, the intercept of the Q1 curve is: _________. Use one decimal in your answer and round it up. That is, if the number is 8.74, write 8.7, and if the number is 8.76, write 8.8.

Please explain this concept! :) thank you!

Answer 1

Taking the relation between Price and Q1, For every $4 increase in price, quantity supplied increases by 10unit which is constant throughout.

thus For $12 increase in price, quantity supplied increases by 30unit.

Thus when price=0, quantity supplied=94.

Intercept of Q1=94