How do you write a linear supply function?
In its most basic form, a linear supply function looks as follows: y = mx + b. In this case, x and y represent the independent and dependent variables. Meanwhile, m shows the slope of the function, and b represents its y-intersect (i.e., the point where the function intersects the y-axis).
How do you find the slope of a supply function?
Since slope is defined as the change in the variable on the y-axis divided by the change in the variable on the x-axis, the slope of the supply curve equals the change in price divided by the change in quantity. Between the two points labeled above, the slope is (6-4)/(6-3), or 2/3.
What is an example of supply?
The noun means an amount or stock of something that is available for use. That stock has been supplied. A mother, for example, may take a large supply of diapers (UK: nappies) with her when she goes on vacation with her baby. This means a large amount that is available for use.
How to explain the slope of a linear supply function?
Explain a supply function (equation) of the form Qs = c + dP. Plot a supply curve from a linear function (eg, Qs = –30 + 20 P). Identify the slope of the supply curve as the slope of the supply function Qs = c + dP, that is d (the coefficient of P).
How do you plot a linear supply curve?
Linear Supply curve. A linear supply curve can be plotted using a simple equation P. = a + bS. a = plots the starting point of the supply curve on the Y-axis intercept.
How to calculate a linear supply and demand function?
If we do this with the values from our example above (1, 250), we get the following equation: 250 = 250*1. As you can see, this equation still holds. Thus, the supply function we calculated above must be correct. In economics, we often use linear supply and demand functions to make calculations.
How to plot the change in the supply function?
Plot the new supply curve. If the supply function now changes to Qs = -50 + 12P, draw up a new table to show the change in the values for quantity supplied for prices from $4 – $15. Plot this new supply curve.
