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Chapter 3: Q.15 (page 78)

Will supply curves have the same shape in all

markets? If not, how will they differ?

Short Answer

Expert verified

The supply curve shows the relation between the price and quantity a seller is able or willing to supply.

Curve shape varies steeper, flatter, straight, or more curved.

Step by step solution

01

Step 1. Definition

Supply curve shows the relationship between price of a product and the quantity supplied of the product. Because of the direct relationship between price and quantity supplied, the supply curve would be an upward sloping line.

02

Step 2. Explanation

The shape of the supply curve is not the same in every market as it depends on theprice elasticity of supply.

For instance, crude oil is limited in quantity, in this case, the supply curve of natural resources will be steeper because production can be done under certain limits.

So, based on the elasticity, the supply curve would be steeper, flatter, a 45 degree line, or more curved.

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Most popular questions from this chapter

If the price is above the equilibrium level, would

you predict a surplus or a shortage? If the price is below

the equilibrium level, would you predict a surplus or a

shortage? Why?

Suppose the price of gasoline is \(1.60 per gallon. Is the quantity demanded higher or lower than at the equilibrium price of \)1.40 per gallon?

How can you locate the equilibrium point on a

demand and supply graph?

Table 3.9 illustrates the market's demand and supply for cheddar cheese. Graph the data and find the equilibrium. Next, create a table showing the change in quantity demanded or quantity supplied, and a graph of the new equilibrium, in each of the following situations:

(a) The price of milk, a key input for cheese production, rises, so that the supply decreases by 80pounds at every price.

(b) A new study says that eating cheese is good for your health, so that demand increases by 20%at every price.

Price per poundQdQs
\(3.00750540
\)3.20700600
\(3.40650650
\)3.60620700
\(3.80600720
\)4.00590730

Table 3.8 shows the information on the demand and supply for bicycles, where the quantities of bicycles are measured in thousands.

PriceQdQs
\(1205036
\)1504040
\(1803248
\)2102856
\(2402470

(a) What is the quantity demanded and quantity supplied at a price of \)120?

(b) At what price is the quantity supplied equal to 48,000?

(c) Graph the demand and supply curves for bicycles. How can you determine the equilibrium price and quantity from the graph? How can you determine the equilibrium price and quantity from the table? What are the equilibrium price and the equilibrium quantity?

(d) If the price was $120, what would the quantities demanded and supplied be? Would a shortage or surplus exist? If so, how large would the shortage or surplus be?
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