Considerthe following firm-levelsupply schedule for oranges:
q = f(P) = 2P - 2, where P= themarket price of oranges.
a. If there are 10 identical firms in the market, then what is the equation for the market supply schedule (Q)? Find the derivative of market supply with respect to price when there are 10 firms.
b. Suppose there are N firms in the market. What is the equation for market supply? Find the partial derivative of market supply with respect to price. Verify that this equation is the same as above when N=10.
c. Sketch the market supply schedule in a diagram whenN=10; be sure to identify the vertical intercept and the slope of the supply schedule in your diagram (HINT:mind your P's andQ's!). Verify in your diagramand using calculus that this market supply schedule obeys the law of supply.