Question

your instructor gives you two equations: 1) q = 20 + p and 2) q = 100 + 5p. what types of curves are 1) and 2)? options: equation 1) is the supply curve whereas equation 2) is the demand curve; both are demand curves; equation 1) is the demand curve whereas equation 2) is the supply curve; both are supply curves

Explanation:

To determine the type of curves (demand or supply), we analyze the relationship between quantity (Q) and price (P). In supply - demand analysis:

• Supply Curve: The quantity supplied (\(Q_s\)) generally has a positive relationship with price (\(P\)), meaning as \(P\) increases, \(Q_s\) increases. The slope of the supply curve (when \(Q\) is a function of \(P\)) is positive.
• Demand Curve: The quantity demanded (\(Q_d\)) generally has a negative relationship with price (\(P\)), meaning as \(P\) increases, \(Q_d\) decreases. The slope of the demand curve (when \(Q\) is a function of \(P\)) is negative.

Now let's analyze the given equations:

1. For Equation 1: \(Q = 20+P\). The slope of this equation (the coefficient of \(P\)) is \(1\), which is positive. This is consistent with the supply curve's positive price - quantity relationship.
2. For Equation 2: \(Q = 100 + 5P\). The slope of this equation (the coefficient of \(P\)) is \(5\), which is also positive. This is also consistent with the supply curve's positive price - quantity relationship.

So both equations represent supply curves since they have a positive relationship between \(Q\) and \(P\).

Answer:

D. Both are supply curves