Question

Suppose the supply function for avocados is Q = 58 + 15p - 20p_f. where P_f is the price of fertilizer. If the price of fertilizer rises by $1.10, how will this affect the supply curve for avocados? If the price of fertilizer rises by $1, 10, then the supply of avocados will change by units at each price. (Enter your response as a whole number and include a minus sign if necessary.) Using the line driving tool, show how an increase in the price of fertilizer affects the avocado supply curve. Label this new supply curve 'S^2.' Carefully follow the instructions above, and only draw the required object.

Answer 1

-22.

There will be the decrease in price hence the supply curve shifts to the left.

Step-by-step explanation:

So, it is given from the question above that the supply function for avocados is Q = 58 + 15p - 20p_f.

The p_f given in the question = $1.10 which is the price given for the fertilizer as it rises that is to say it rises at that amount.

If the price increases by $1.10, then we have a reduction of -( 20 × 1.10) = -22.

Kindly note that the negative sign denotes the reduction in supply. This reduction causes the supply curve to shift to the left.

The diagram for the supply curve Is given in the attached picture.