Can someone please help me to find the slope of linear supply function? The instructor told to provide detailed explanations of the computations, but I do not have any idea.
krishna asked 2 years ago
Hi Krishna. Good question. Here is my solution.
When price increases, quantity supply increases. When price decreases, quantity supply decreases.
Slope of linear supply function = ΔQsΔP\frac{\Delta Q^s}{\Delta P}ΔPΔQs = Change in quantity supplyChange in price\frac{\text{Change in quantity supply}}{\text{Change in price}}Change in priceChange in quantity supply = Q2s − Q1sP2 − P1\frac{Q_2^s \, - \, Q_1^s}{P_2 \, - \, P_1}P2−P1Q2s−Q1s
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Hi Krishna. Good question. Here is my solution.
When price increases, quantity supply increases.
When price decreases, quantity supply decreases.
Slope of linear supply function =ΔPΔQs = Change in priceChange in quantity supply = P2−P1Q2s−Q1s