Question

If Sl (p) = p- 10 and S2(p) = p- 15, then at what price does the industry
supply curve have a kink in it? Use step by step to solve it.

Answer 1

Step 1: The industry supply curve is the sum of the two individual supply curves, Sl(p) and S2(p).

Step 2: The kink in the industry supply curve occurs when the two individual supply curves intersect.

Step 3: To find the point of intersection, set Sl(p) = S2(p) and solve for p.

Step 4: Sl(p) = S2(p)

Step 5: p - 10 = p - 15

Step 6: 10 = 15

Step 7: This is not true, so there is no kink in the industry supply curve.