# How to solve these questions, better to have the works and explainations.thanks.

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4. Considerthe following firm‐levelsupply schedule for oranges:

q = f(P) = 2P ‐ 2, where P= themarket price of oranges.

a. Ifthere are 10 identicalfirmsin themarket,then whatisthe equation forthemarketsupply

schedule (Q)? Find the derivative ofmarketsupply with respectto price when there are 10

firms.(5 points)

b. Suppose there areNfirmsin themarket. Whatisthe equation formarketsupply? Find the

partial derivative ofmarketsupply with respectto price. Verify thatthis equation isthe same

as above whenN=10.(5 points)

c. Sketch themarketsupply schedule in a diagramwhenN=10; be sure to identify the vertical

intercept and the slope ofthe supply schedule in your diagram(HINT:mind your P’s andQ’s!).

Verify in your diagramand using calculusthatthismarketsupply schedule obeysthe law of

supply.(5 points)

Part Four: Market Equilibrium

5. Using themarket demand and supply functionsfromquestions 3 and 4 (respectively);find

the equilibriumprice and quantity traded whenN=10 and I=10. Show your work. (5 points)

6. Suppose consumerincome decreasesto I=5; find the new equilibriumprice and quantity

7. In a well‐labeled diagram, illustrate the effect onmarket price and quantity of a decrease in

consumerincome on themarketfor oranges(i.e.,the scenario in questions 5&6, above).

However, you do not need to label any intercepts orslopes, justthe original and new

equilibriumprices and quantities.(5 points)

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