Dominick Salvatore Schaums Outline of Microeconomics, 4th edition Schaums Outline Series 2006

CHAP. 2] DEMAND, SUPPLY, AND EQUILIBRIUM: AN OVERVIEW 29
(c) The things that are kept constant in defining a producer’s supply schedule and in drawing the producer’s
supply curve are the technology in the production of the commodity, the prices of the inputs necessary to
produce this commodity, and the features of nature (if X is an agricultural product).
(d ) Any price above zero will induce the producer to place some quantity of commodity X on the market.
2.13 (a) From the producer’s supply schedule for commodity X in Table 2.15, draw the supply curve. (b) In
what way is this supply curve different from the one in Problem 2.12?
Table 2.15
P x ($) 6 5 4 3 2 1
Qs x 42 40 36 30 20 0
(a)
Fig. 2-16
(b)
This producer’s supply curve is given by a curve, while in Problem 2.12 it was given by a straight line. In
the real world, a supply curve can be a straight line or a curve. For simplicity, in Problem 2.12 (and in the
text) we dealt with a straight line (positively sloped) supply curve. Also to be noted is that according to
the supply curve drawn above, the producer will begin to offer some quantity of X for sale only for prices
above $1.
2.14 Table 2.16 gives two supply schedules of a producer of commodity X. The first of these
two supply schedules (Qs x ) is the same as the supply schedule in Problem 2.13. The second
(Qs 0 x ) resulted from an increase in the prices of the inputs necessary to produce commodity X
(everything else remained constant). (a) Plot the points of the two supply schedules on the
same set of axes and get the two supply curves. (b) What would happen if the price of X
rose from $3 to $5 before the shift in supply? (c) What quantity of commodity X will the producer
place on the market at the price of $3 before and after the supply curve shifted up? (d)
What happens if at the same time the producer’s supply of X decreases, the price of X rises
from $3 to $5?
Table 2.16
P x ($) 6 5 4 3 2 1
Qs x 42 40 36 30 20 0
0
Qs x 22 20 16 10 0 0