Assume supply is described by QS = 40 + 6P - 8W + 10F

where W is the wage and F is the number of competing firms

1)If the current wage rate is $20 and there are 60 competitors, what is the equation of the supply function? Graph it.

2)Graph the current demand function of QD = 600 - 6P (do P from 1 to 20)

3)Determine the EQ price and quantity

4)Recent labor negotiations have pushed the industry wage to $25, and as a result 5 competing companies have closed. Graph the change; what happens to the new EQ P & Q?

5)Changes in customer preferences have resulted in QD = 625 - 10P; graph this change. What is happening to D?

6)What happens to the new EQ P & Q?

7)Because of the dramatic changes in this industry, a new law is passed imposing a maximum price set at the P from 3). What will be the result in this market of such a law?