The supply curve of a firm is given by the equation q = 250 p − 250 . If the price decreases by 2 units, ______ Options: A . &nbspquantity increases by 250 B . &nbspquantity decreases by 250 C . &nbspquantity increases by 500 D . &nbspquantity decreases by 500

The supply curve of a firm is given by the equation q=250p−250. If the pr

Question

The supply curve of a firm is given by the equation

q = 250 p - 250

. If the price decreases by 2 units, ______

Options:

A . quantity increases by 250

B . quantity decreases by 250

C . quantity increases by 500

D . quantity decreases by 500

Answer: Option D
:
D
Initially, let the price be

p_{1}

Q u a n t i t y, q_{1} = 250 p_{1} - 250

At a price of

p_{1} - 2

Q u a n t i t y, q_{2} = 250 (p_{1} - 2) - 250 q_{2} = (250 p_{1} - 250) - 500 q_{2} = q_{1} - 500

Quantity reduces by 500 units

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