The supply function for good X is given by Qxs = 1,000 + PX - 5PY - 2PW, where PX is the price of X, PY is the price of good Y,

Question

3 years ago

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The supply function for good X is given by Qxs = 1,000 + PX - 5PY - 2PW, where PX is the price of X, PY is the price of good Y,

and PW is the price of input W. If the price of input W increases by $20, then the supply of good X:
will increase by 20 units.

will increase by 40 units.

will decrease by 20 units.

will decrease by 40 units.

Business

1 answer:

marin [14] · Answer 1 · 2022-05-01T18:45:14+03:00

Answer:

will decrease by 40 units.

Explanation:

In supply function for good X the Price of W is Doubled. So any changein the price will increase the PW by double amount. The two times of price of good Y is subtracting from the supply function and price of the W will ultimately decrease the quantity demanded by double effect of each one dollar increase in it. So the supply of good X will decrease by 40 units.