" a straight line supply curve is drawn indicating a non linear supply function." True/false.give reason .
The above statement is false.
Reason
A non-linear supply function is diagrammatically depicted as curve rather than a straight line, whereas, a linear supply function is diagrammatically represented as straight supply line.
In order to understand this point, let's recall the general equation for line. It is:
y = c + mx
where,
y and x represent dependent and independent variables
m represents slope of line
c represents the vertical intercept of line
General equation of linear supply function
S(x) = c + m(Px)
where,
S(x) and Px represent supply of good x (dependent variable) and price of good x (independent variable)
m represents slope of supply line
c represents the vertical intercept of supply line
Now, since this equation has the highest degree as 1, so it is a linear function. For all linear functions, we know that these functions are diagrammatically represented as straight lines.
If in case, the highest degree of any equation (supply function) is more than 1, saay 2 or 3 or 4 accordingly, we will regard the supply function as quadratic and polynominal equations. These equations of degree more than 1 are regarded as non-linear functions and are represented as curve (parabola, hyperbola, ellipse, curvilinear, circle, etc.)
Reason
A non-linear supply function is diagrammatically depicted as curve rather than a straight line, whereas, a linear supply function is diagrammatically represented as straight supply line.
In order to understand this point, let's recall the general equation for line. It is:
y = c + mx
where,
y and x represent dependent and independent variables
m represents slope of line
c represents the vertical intercept of line
General equation of linear supply function
S(x) = c + m(Px)
where,
S(x) and Px represent supply of good x (dependent variable) and price of good x (independent variable)
m represents slope of supply line
c represents the vertical intercept of supply line
Now, since this equation has the highest degree as 1, so it is a linear function. For all linear functions, we know that these functions are diagrammatically represented as straight lines.
If in case, the highest degree of any equation (supply function) is more than 1, saay 2 or 3 or 4 accordingly, we will regard the supply function as quadratic and polynominal equations. These equations of degree more than 1 are regarded as non-linear functions and are represented as curve (parabola, hyperbola, ellipse, curvilinear, circle, etc.)