# Question: the supply of pespi is given by the following equation...

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The supply of Pespi is given by the following equation: Q p S = −24 + 6Pp + Pc + 2Pw where Q p S is the quantity of Pespi supplied, in millions of litres, Pp is the price of Pespi per litre, Pc is the price of Coek per litre; and Pw is the price of the water used to make the products per litre.

(a) Graph the inverse supply curve when Coek sells for $4 a litre and water sells for $2 a litre What is the supply choke price?

(b) How much Pespi will be supplied at a price of $4 and a price of $8?

(c) What will happen to the supply of Pespi if the price of Coek increases to $6 per litre? Graph the new inverse supply carefully and indicate the new choke price.

(d) Suppose instead that the price of Coek remains $4, but the price of water decreases to $1. What will happen to the supply of Pespi as a result?