Question: the supply of wheat is given by the following equationqws...
The supply of wheat is given by the following
equation:QWS = –6 +
4Pw – 2Pc
where QWS is the quantity of wheat supplied, in millions of bushels;Pw is the price of wheat per bushel;
Pc is the price of corn per bushel; and Pf is the price of tractor fuel per gallon.
a. Graph the inverse supply curve when corn sells for $4 a bushel and fuel sells for $2 a gallon.
What is the supply choke price?
b. How much wheat will be supplied at a price of $4? $8?
c. What will happen to the supply of wheat if the
price of corn increases to $6 per bushel? Explain
intuitively; then graph the new inverse supply
carefully and indicate the new choke price.