The price at which sellers are not willing to supply a good is $700 per unit.If the supply curve passes through the point (3,718),what is the equation of the supply curve?

Question

Quizplus · Accepted Answer

The supply curve equation can be found using the point-slope form of a linear equation, $y - y_1 = m(x - x_1)$, where $m$ is the slope and $(x_1, y_1)$ is a point on the line. Given the price at which sellers are not willing to supply is $700 (this can be seen as the y-intercept where quantity supplied, $QS$, is 0), and the supply curve passes through the point (3, 718), we can find the slope ($m$) by recognizing that when $QS = 3$, $P = 718$. The slope $m$ is the change in price ($\Delta P$) over the change in quantity supplied ($\Delta QS$), which is $(718 - 700) / (3 - 0) = 18 / 3 = 6$. Therefore, the equation of the supply curve is $P = 700 + 6QS$, which matches choice A.

The Price at Which Sellers Are Not Willing to Supply