Question

Suppose the world supply curve is p equals 20 plus 0.02 Upper Q Subscript font size increased by 1 s​, and the demand curve of other countries of the world is p equals 80 minus 0.02 Upper Q Subscript Upper D. The excess or residual supply function is A. Upper S Superscript r Baseline (p )equals negative 5 comma 500 plus 100 p. B. Upper S Superscript r Baseline (p )equals negative 6 comma 000 plus 100 p. C. Upper S Superscript r Baseline (p )equals negative 5 comma 000 plus 100 p. D. Upper S Superscript r Baseline (p )equals negative 3 comma 900 plus 100 p. The excess or residual supply at a price of​ $60 is

Answer 1

Residual supply = Quantity supplied - Quantity demanded = (p - 20)/0.02 - (80 - p)/0.02

= (p - 20 - 80 + p)/0.02 = (2p - 100)/0.02 = 100p - 5000

So, Excess or residual supply function is: A) Sr(p) = - 5000 + 100p

At price of $ 60, Excess supply = - 5000 + 100(60) = - 5000 + 6000 = 1000

Step-by-step explanation: