## Part 1. Supply Curves

**Cost minimization Example**

*Suppose a firm has production function *$Q=K^{1/4}L^{1/4}$*. Suppose the wage rate is *$w$* and the capital rental rate is *$r$*. Set up the lagrangian for the cost minimization problem and solve for the cost function.*

*Try on your own before watching the video.*

**Building Market Supply**

*Suppose there are two types of firm. There are 100 firms of "type 1", which has cost function *$c_1(q)=2q^2$*. There are also 20 firms of "type 2" which have cost function *$c_2(q)=10+\frac{1}{2}q^2 + q$*. *

*First, find the individual supply function of each firm. *

*Second, find market supply.*

## Part 2. Demand Curves

**Elasticity Example**

*What is the price elasticity of demand for the demand curve *$Q=100-p$* at the following prices:*

- $p=90$
- $p=50$
- $p=1$

*Try this on your own before watching the following video for a walk-through.*

*Did you feel like any of the videos above were confusing, or could use more detail? If you're a student at Iowa State University, send me a quick note at mclancy@iastate.edu, referencing the video number and your issue, if applicable.*