(A) Based on the information of the demand for mutton as follows:

QD_M=50 P_M^-0.974 P_B ^0.159 Y^0.714

where QD_M=demand for mutton

P_M=price of mutton

P_B=price of beef

Y=income

Own-price elasticity (E_ii)=-0.974

Cross-price elasticity (E_ij)=0.159

Income elasticity (E_iy)=0.714

1. What is the effect on the demand for mutton if the price of mutton increase by 3%?
2. Is beef a substitute or complementary good, and why? If the price of beef increases by 10%, what is the effect on the consumption of mutton.
3. Show graphically the effect on consumer and producer welfare if there is a subsidy in the production of mutton.

(B) You are just being hired by a company which produces maize for feeds. As an freshly graduated, your superior asked you estimate a supply function of maize.

1. Show the specification of the supply function
2. Based on the theory, how a supply function is derived?