Question

Supply Schedule for Ecobits

Price per ecobit : 5, 10, 15, 20, 25, 30, 35, 40

Quantity supplied in thousands: 100,150,200,250,300,350,400,450


Question #1

If the price of Ecobits moves from 15 to 20, what happens to the quantity of Ecobits supplied? Why?


Question #2

If the price of Ecobits moves from 25 to 20, what happens to the quantity of Ecobits supplied? Why?

Answer 1

Step-by-step explanation:

Question #1:

If the price of Ecobits moves from 15 to 20, the quantity of Ecobits supplied increases from 200 to 250 units, because of the supply law. This law states that: keeping other factors constant, producers are willing to produce more if price increases because they will have more profits.

Question #2:

If the price of Ecobits moves from 25 to 20, the quantity supplied decreases from 300 to 200 units. This happens also because of the supply law. Keeping other factors constant, producers will reduce their production because if prices decrease, they will perceive less profits.