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Explain the relationship between price and quantity supplied on a supply curve.

Economics

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8 steps

Okay, Janelle, let's work through Question 2.

Part a· 3 steps

To plot and draw the supply curve, you will use the given price and quantity supplied data.

  1. Identify the coordinate points (Quantity, Price) from the table.

    • (50, 0.10)
    • (100, 0.15)
    • (150, 0.20)
    • (200, 0.25)
    • (250, 0.30)
    • (300, 0.35)
    • (350, 0.40)

  2. Plot these points on a graph where the x-axis represents the Quantity of Mints and the y-axis represents the Price of Mints.

  3. Draw a line connecting these points.

    This line represents the supply curve. Label this curve S.

Part b· 5 steps

Let's fill in the blanks using the provided table.

  1. Find quantity supplied at $0.25.

    At a price of 0.25,supplierswouldbewillingtooffer0.25, suppliers would be willing to offer \boxed{200}$ mints.

  2. Find quantity supplied at $0.30.

    Ceteris paribus, if the price of mints increased to 0.30,supplierswouldbewillingtooffer0.30, suppliers would be willing to offer \boxed{250}$ mints.

  3. Describe the change from $0.25 to $0.30.

    Such a change would be an increase\boxed{increase} in quantitysupplied\boxed{quantity supplied}.

  4. Find quantity supplied at $0.20.

    If the price of mints decreased to 0.20,supplierswouldbewillingtooffer0.20, suppliers would be willing to offer \boxed{150}$ mints.

  5. Describe the change to $0.20.

    Such a change would be called a decrease\boxed{decrease} in quantitysupplied\boxed{quantity supplied}.

Part c

The relationship between price and quantity supplied on a supply curve is generally positive or *direct

This means that as the price of a good or service increases, the quantity that suppliers are willing and able to offer for sale also increases. Conversely, if the price decreases, the quantity supplied will decrease. This fundamental principle is known as the Law of Supply.

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