Assume the supply function for good X can be written as Qs = -100 + 27

Assume the supply function for good X can be written as Qs = -100 + 27Px – 5Py – 1.8W, where Px = the price of X, Py = the price of good Y, and W = Wage index for workers in industry X. According to this equation:

A) X and Y are substitutes in production.
B) X and Y are complements in production.
C) a decrease in wages would cause a decrease in the quantity supplied at each price.
D) each one unit increase in price causes quantity supplied to increase by 73 units.

ANSWER

A