Supply Curve Analysis

question 15

Essay

Supply Curve Analysis. A review of industry-wide data for the frozen grape juice manufacturing industry suggests the following industry supply function:

where Q is cases supplied per year, P is the wholesale price per case ($), P_L is the average price paid for unskilled labor ($), P_K is the average price of capital (in percent), and W is weather measured by the average seasonal temperature in growing areas (in Fahrenheit).
A. Determine the industry supply curve for a recent year when P = $40, PL = $10, PK = 15%, and W = 70 degrees Fahrenheit. Show the industry supply curve with quantity expressed as a function of price and price expressed as a function of quantity.
B. Calculate the quantity supplied by the industry at prices of $30, $40 and $50 per case.
C. Calculate the prices necessary to generate a supply of 10 million, 25 million, and 40 million cases.