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20 May, 20:59

The supply function for good X is given by Qxs = 1,000 + PX - 5PY - 2PW, where PX is the price of X, PY is the price of good Y and PW is the price of input W. If the price of input W increases by $10, then the supply of good X

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  1. 20 May, 23:28
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    Will increase by 10 units

    Explanation:

    Given the formula for quantity supplied Qxs = 1,000 + PX - 5PY - 2PW

    We are told to gauge the effect of increase in input (W) on quantity supplied (Qxs)

    So assuming this protein of the equation is constant

    1,000 + PX - 5PY = k

    That is there is no change in price of X and Y

    Qxs = k - P (W)

    So it can be seen that an increase in P (W) is a negative change in the equation

    Qxs k - ∆10

    Resulting in reduction in Qxs by 10
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